The hedge fund run by Sears chairman Edward Lampert is offering to buy much of Sears' remaining assets for about $4.6 billion with hopes of keeping the bankrupt retailer in business and continuing to employ about 50,000 of its workers.
The $4.6 billion bid includes about 500 stores, headquarters and distribution centers, and Sears brands and businesses including Kenmore, DieHard and Sears Home Services.
"ESL (Investments) believes that a future for Sears as a going concern is the only way to preserve tens of thousands of jobs and bring continued economic benefits to the many communities across the United States that are touched by Sears and Kmart stores," Lampert's ESL said in the letter sent to Sears' investment banker Wednesday and filed with the U.S. Securities and Exchange Commission Thursday.
Hoffman Estates, Ill.-based Sears, which filed for Chapter 11 bankruptcy protection in October, got the Bankruptcy Court's approval to begin auctioning assets last month.
In the letter, ESL said it believes long-struggling Sears can successfully reorganize around the smaller group of stores. The fund said it expects to continue employing about 50,000 Sears workers and reinstate a severance program in place before the company sought bankruptcy protection. It would also continue to honor gift cards and warranties.
ESL said its offer is contingent on its ability to acquire all the assets included in its bid since it believes they will perform better together. ESL would also require Sears to release it from any liability related to transactions between the retailer and the hedge fund prior to the bankruptcy filing.
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A committee of Sears' unsecured creditors has raised questions about financial dealings between ESL, Sears and Lampert, who was also the retailer's CEO prior to its bankruptcy filing. Both Sears and the creditors committee are looking into transactions between ESL and the retailer, including loans that ESL said amount to $2.4 billion over the past several years.
Others interested in acquiring Sears' assets have until Dec. 28 to submit bids under the timeline approved by the bankruptcy court. If other bids come in, the auction would be held Jan. 14.
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