From Newsmax

Sears Holdings Corp. is preparing to file for Chapter 11 bankruptcy protection as early as Friday, sources said on Wednesday

Negotiations between Sears Chief Executive Eddie Lampert and Sears’ special board committee are at a standstill over the committee’s refusal to approve Lampert’s rescue plan, the sources said.

Sears Holdings shares lost nearly a third of their value in early trading on Wednesday after a report said that the beleaguered retailer had hired advisers to prepare for a bankruptcy filing ahead of a debt payment deadline.

Shares of Sears (SHLD.O), an iconic American retail brand which traded above $100 a decade ago but have fallen to less than $1 in the past year, were down at 41 cents in trading before the bell.

The Wall Street Journal late on Tuesday said Sears had hired boutique advisory firm M-III Partners LLC to help it prepare a filing before a $134 million debt payment becomes due on Monday, the newspaper said, citing people familiar with the situation.

Sears had no comment on the report, which also said that the company’s billionaire Chief Executive Officer Eddie Lampert, who has rescued the company in the past, could make the payment to avert an in-court restructuring.

Sears, which was the world’s largest retailer in the 1960s, has been struggling in recent decades, in the face of declining foot traffic as brick-and-mortar stores struggle to compete with online stores led by Amazon.com.

The Hoffman Estates, Illinois-based retailer has posted seven straight years of losses, while its sales have not grown since the 2008 financial crisis.

A Sears special committee is weighing a prior offer from Lampert to acquire the retailer’s Kenmore appliances brand and its home services business for as much as $480 million. Sears warned it could go out of business as it waits for approval from the committee on the deal.

Lampert, who also runs hedge fund ESL Investments Inc, has said the company should take steps to reduce its debt load to $1.2 billion from $5.6 billion. Lampert and his hedge fund own about 50 percent of Sears.

However, Lampert wants to restructure the debt without filing for bankruptcy protection, because he views bankruptcy as risky for retailers, the Journal said.

Lampert also expects that Sears could get more value for its assets by selling them while it is a going concern, the newspaper added.

In May, Sears said it plans to shut 72 locations by the end of third quarter to stem losses in the face of deepening financial distress.

In another attempt to avoid bankruptcy, Sears last year sold its Craftsman tool brand to power tool maker Stanley Black & Decker for $900 million.

Sears has closed nearly 400 stores since last year. It operates a network of stores with 866 full-line and specialty retail stores in the United States as of Aug. 4, operating through Kmart and Sears.

© 2018 Thomson/Reuters. All rights reserved.

IMAGE: the outside sign on a Sears store
(AP)

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