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This guy, again.............: https://www.cnbc.com/2019/01/15/sears-deal-with-chairman-eddie-lampert.html
Midday Tuesday, billionaire Eddie Lampert’s efforts to keep Sears alive were dead.
Lawyers and bankers who had been holed up in the offices of Weil, Gotshal & Manges on Fifth Avenue to work out a deal between Lampert and Sears Holdings were resigned to the reality that the company would liquidate and the Sears chairman’s efforts to save up to 50,000 jobs would have been for naught, people familiar with the situation told CNBC.
There were too many sticking points, according to the people, who spoke on condition of anonymity because the information is confidential.
The roughly $5 billion offer Lampert was making through an affiliate of his hedge fund ESL Investments wasn’t large enough to cover all of the company’s administrative expenses, like vendor payments and advisory fees. Sears’ unsecured creditors had virulently argued since day one against Lampert’s efforts to revive the retailer. The offer relied on a $1.3 billion so-called credit bid, meaning the deal is funded in part by forgiving debt owed to ESL. Sears’ unsecured creditors have objected to its use.
Sears called up the bankruptcy judge to share the news.
But Judge Robert Drain didn’t accept it, the person said. He told Sears and ESL to give it another go. There was a chance of saving thousands of jobs and they should try to figure out how to do so – by midnight.
Sears and ESL’s lawyers hunkered down again, as advisors ran through the offices meeting with Sears’ restructuring committee and ESL.
But midnight came and went. By 2 a.m., after hours of gamesmanship and negotiations, Sears and ESL finally reached a deal. ESL agreed to boost its offer by about $150 million, putting the full bid slightly over $5.2 billion, the people said, and keeping the company from shutting about 400 stores.
Lampert found yet one more rabbit to pull out of a hat with a seemingly infinite capacity for bunnies.
Neither Sears nor ESL are out of the woods yet. Sears unsecured creditors are opposed to the bid, people familiar with situation said. They have said there may be claims against Sears for deals done under Lampert’s tenure as CEO and its largest shareholder, which include Sears’ spinoff of Lands’ End in 2014 and transactions with Seritage Growth Properties, a real estate investment trust Lampert created through some Sears’ properties a year later.
If the unsecured creditors formally object to the bid, the bankruptcy judge will need to assess the merits of their claim at a hearing Feb. 1 at the Southern District of New York Bankruptcy Court in White Plains. Lampert needs Drain’s approval for the bid to be official.
Such lawsuits and pressure are not atypical of bankruptcies. In a situation as thorny as Sears’, however, it is possible the unsecured creditors believe they can squeeze more out of Sears through litigation than through a sale to Lampert.
As part of the deal struck in the early hours, ESL is offering $35 million to settle those claims, the person said. It is likely the unsecured creditors will, at the very least, push for more settlement money from Lampert.
The unsecured creditors have eight days to object to a bid.Sears then has two days to offer up a response.
A spokesperson for ESL declined comment.