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Sears preparing to file for bankruptcy as early as Friday -sources
[NEW YORK] Sears Holdings Corp is preparing to file for Chapter 11 bankruptcy protection as early as Friday, sources said on Wednesday, casting doubt over the future of what was once the world's largest retailer.
Negotiations between Sears Chief Executive Officer Eddie Lampert and the company's special board committee are at a standstill over the committee's refusal to approve Lampert's rescue plan, the sources said. The committee is concerned it will be opening the company up to litigation, one source said.
Sears shares were down 27 per cent at 43 cents. The stock, which traded above US$100 a decade ago, has fallen to less than $1 in the past year.
The Wall Street Journal late Tuesday said Sears had hired boutique advisory firm M-III Partners LLC to help prepare a bankruptcy filing before a US$134 million debt payment comes due on Monday, citing people familiar with the matter.
Sears had no comment on the report. The Journal also reported the billionaire Lampert, who has rescued the company in the past, could make the payment to avert an in-court restructuring.
The Hoffman Estates, Illinois-based retailer, once an iconic American retail brand, has posted seven straight years of losses, while its sales have not grown since the 2008 financial crisis.
In another attempt to avoid bankruptcy, Sears last year sold its Craftsman tool brand to power tool maker Stanley Black & Decker for US$900 million.