The epic saga of Sears has entered a new and possibly final chapter. The 132-year-old retail chain that filed Chapter 11 bankruptcy in October of 2018 has received a $5.2 billion offer for the last 450 retail stores as well as all other remaining assets. The offer was made by Eddie Lampert and his ESL hedge fund, which took over Sears in 2013. The offer will need approval in the courts on February 1. The deal would then be closed on February 8.
Creditors wanted liquidation
The iconic company still has 45,000 employees, which got to keep their jobs despite the fact that unsecured creditors wanted to liquidate the company, claiming its sum parts are worth more than the company. Nevertheless, this move will no doubt provide a tax break for ESL since Sears has been operating at a loss.
This latest drama is actually part of an ongoing series of creative financial moves from Lampert and ESL. The Sears sold its profitable and reputable Craftsman Tools division to Stanley. Sears with Lampert in charge also sold off the popular Lands’ End clothing line and Kenmore appliance line to his ESL hedge fund. ESL also bought hundreds of stores, which it either then rented back to the retailer or sold the buildings and property in more desire neighborhoods. Some have questioned the wisdom of these decisions, but each has added much needed liquidity to the beleaguered retailer.
Real estate, high finance and legal issues
Lampert is certainly marching to the beat of his own drum, but he may get the last laugh. Other business owners usually do not have a hedge fund to support their business decisions, so it is wise to speak with an attorney about business law, tax law and selling commercial property. They can provide steady guidance whether a company is worth thousands or billions of dollars.
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