Sears Gets Temporary Reprieve: Lampert Has Hours To Raise $120 Million

Sears Holding Corp SHLDQ Chairman Eddie Lampert has until 4 p.m. Wednesday to come up with a $120 million cash down payment in a last-minute bid to keep the iconic retail chain in existence.

Sears agreed in principle Tuesday to consider Lampert’s latest takeover bid — avoiding, at least temporarily, the end of the 126-year-old chain. If he’s able to come through with the bid, it could save tens of thousands of jobs at the once-dominant chain, though it would be much smaller than in its glory days.

Lampert's Bid 

Lampert, who also runs the hedge fund ESL Investments and was formerly CEO of Sears, previously made a $4.4-billion bid to rescue the chain. The bid fell short, triggering liquidation plans. 

Sears’ agreement to consider the new bid prompted U.S. Bankruptcy Judge Robert Drain to put off liquidation on Tuesday, giving Lampert the new Wednesday afternoon deadline to come up with the down payment. Reuters and CNBC both reported that Lampert was still working late Tuesday to secure financing.

If Lampert comes up with the down payment money, he’ll be able to participate in a Jan. 14 bankruptcy auction. Though there are going to be other bidders, Lampert’s is the only bid designed to keep Sears open, while others would liquidate it to pay creditors. Whoever wins the auction would still need to secure final approval from the bankruptcy court at the end of January.

October Chapter 11 Filing 

Sears Holdings also includes the Kmart chain, which Lampert merged with Sears in 2004.

Hoffman Estates, Ill.-based Sears filed for Chapter 11 bankruptcy protection in October, following years of revenue declines and store closures. Since then the company has continued to close dozens of Sears and Kmart stores.

Sears was trading down 9.74 percent at 35 cents at the time of publication Wednesday. 

Related Links:

Sears Chairman Reportedly Submits 11th-Hour Bid As Retailer Faces Liquidation

Morgan Stanley: A Sears Bankruptcy Could Benefit JCPenney

Photo courtesy of Sears.