Sears close to being liquidated
The chain is in danger of closing its doors forever if there is no bidder for the corporation.
Sears has only a day to be revived. The chain is in danger of being liquidated if the store doesn’t accept a bid to purchase the corporation.
Can Sears be saved?
The 125-year-old chain has been in trouble over the last few years because of declining sales. While many stores have seen customer loss because of the rise of Amazon, Sears has perhaps suffered the most. Many locations have closed, and the business has filed for bankruptcy in October.
The only hope for Sears is if the business accepts the offer of its chair, Eddie Lampert. He proposed a deal to purchase the corporation for $4.6 billion from his hedge fund, ESL Investments. While the offer could solve the company’s financial problems, there are obstacles to the arrangement.
If the company accepts Lampert’s offer, the business will let him own the corporation without taking on too much liability. The chair wouldn’t be responsible for any deals conducted through ESL Investments before Sears filed for bankruptcy. Eric Snyder, bankruptcy expert at law firm Wilk Auslander, said that the agreement would benefit Lampert even more than it would help Sears.
‘The release basically says, ‘If I’m going to pay this amount, you can’t sue me. The creditors are between a rock and a hard place. They are loath to give Lampert a release, but they might not have any other offers,’ said Snyder.
What happens to Sears if there’s no buyer?
While Lampert floated the plan of buying Sears, there are reports that he hasn’t secured all the financing or even formally submitted his bid to buy the company. If there is no agreement by the end of the week, the corporation will likely be broken up into pieces and sold. The liquidation would likely take weeks to complete.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets