Sears hires advisers to prepare bankruptcy filing

  • Sears hires advisers to prepare bankruptcy filing

Sears hires advisers to prepare bankruptcy filing

The Wall Street Journal quoted sources saying Lampert wants to restructure and is anxious that a bankruptcy filing will lead to a liquidation, which has happened with so many retailers, the most recent being Toys R Us.

Sears Holdings is getting things in order for a bankruptcy filing that could come sometime this week.

Sears is considering filing for bankruptcy protection as soon as this week as it faces a large debt repayment on Monday, reports The Wall Street Journal.

Citing people familiar with the situation, the Journal said employees of M-III Partners have spent weeks working on a potential filing and have spent time at the troubled retailer's Hoffman Estates headquarters in recent days.

The company's shares are trading at around 59 cents, down more than 90 percent over the past year.

Sears did not immediately return Fortune's request for comment on the WSJ report.

J.C. Penney's former CEO Marvin Ellison in 2016 positioned the Plano-based retailer to win shoppers from Sears as it closed stores by adding kitchen and laundry appliances to stores.

He thinks the appointment of Carr could indicate that the company might declare bankruptcy. Sears is also considering other options and could choose not to file for bankruptcy, the people said. Lampert divided the expanded company into dozens of units that competed for resources.

In another attempt to avoid bankruptcy, Sears previous year sold its Craftsman tool brand to power tool maker Stanley Black & Decker for US$900 million. Lampert bought Sears in 2004 and merged it with Kmart, in which he had a controlling stake, the next year.

Lampert - Sears's largest shareholder and creditor and the owner of the hedge-fund ESL Investments - asked creditors last month to refinance $1.1 billion in debt before the October 15 payment, according to a filing with the U.S. Securities and Exchange Commission. Sears mentioned those constraints as part of a proposal it offered to sell real estate to help pay down borrowings, which would cut debt by almost 80 percent. Those include Sears Home Services and the company's flagship Kenmore brand, which Lampert offered to purchase in August for $400 million. Lampert's strategy has often involved keeping Sears afloat with loans.