Sears Chairman Eddie Lampert is given another chance by a bankruptcy judge to save the 126-year-old retailer from liquidation and to keep approximately 50,000 jobs.
On Tuesday, Sears announced that it had denied the $4.4 billion bid by Lampert to save the department store chain out of bankruptcy. Apparently, Lampert has opposed the verdict, emphasizing the millions in fees the retailer’s bankruptcy advisors have agreed.
According to presented documents to the bankruptcy court, Sears bankruptcy lawyers, Gotshal, Manges, and Weil, are planning to ask Sears a customary rate of $1,075-$1,600 per hour for the work done by its counsel and partners.
Eventually, Lampert and Sears were given more time by a bankruptcy judge.
ESL Investments, Lampert’s hedge fund, must pay a $120 million deposit by 4 pm Wednesday so Lampert can join the auction scheduled on Monday. He submitted the deposit and revised the bid to roughly $5 billion. The bid may include a $1.8 billion credit bid but cannot be confirmed.
Lampert needed to top the auction to rescue the retailer. Once the prevailing bidder is determined, the bankruptcy court will approve the deal on January 31.
Since filing bankruptcy protection last October 15, Sears has been grappling to keep a number of its stores open. For the past years, the retailer has been suffering in a survival mode, profits had stopped flowing in the company. It never had the chance to receive needed investments to compete against Walmart, Amazon, or Target.
Unsecured creditors of Sears have discussed claims against the company involving deals and transactions made under the tenure of Lampert as CEO and its major shareholders, including Lands’ End clothing brand in 2014 and real estate investment Seritage Growth Properties, which was created through Sears properties.
These unsecured creditors had opposed Lampert’s attempt when he tried to settle $1.8 billion through a credit bid owed to himself to help fund the proposed recovery of Sears.
Nonetheless, ESL clarified that all deals and transactions it had with Sears under Lampert’s management were all supported and recognized by the Sears’ board.