Nation & World

Bankruptcy judge approves sale of Sears

Chairman's plan aims to save some 45,000 jobs

The Gazette

A bankruptcy judge approved the sale of Sears to a hedge fund after a hearing that spanned several days, allowing the chain to avoid liquidation.
The Gazette A bankruptcy judge approved the sale of Sears to a hedge fund after a hearing that spanned several days, allowing the chain to avoid liquidation.

NEW YORK — A U.S. bankruptcy judge on Thursday approved Sears Holdings Chairman Edward Lampert’s $5.2 billion takeover of the beleaguered retailer, allowing the department store chain to avert liquidation and preserve tens of thousands of jobs.

Judge Robert Drain approved the sale after a hearing spanning several days in a White Plains, N.Y., federal bankruptcy court.

He overruled objections, including from an unsecured creditors committee that said the process for selling Sears was unfair to them and argued for a liquidation.

Lampert, who arranged an $11 billion merger between Sears and discounter Kmart in 2005 and tried for years to boost business, wins another chance to try to revive what once was the biggest U.S. retailer.

Lampert, the only bidder offering to keep Sears alive through his hedge fund, ESL Investments, agreed to a deal for 425 stores after round-the-clock negotiations in January.

The takeover aims to preserve about 45,000 jobs.

Terms of the sale allow for some litigation to continue against Lampert and ESL.

Drain said Lampert was “subject to substantial verbal abuse” during the proceedings, noting that critics had characterized the Sears chairman in ways that evoked a ruthless robber baron and a blowhard sitcom character.

“He is a wealthy individual and a big boy and I guess he can take it,” Drain said, adding that some of the abuse may have been justified.

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Lampert stepped down as CEO when Sears filed for bankruptcy Oct. 15, though he remained the retailer’s chairman, largest shareholder and creditor. A restructuring committee of independent directors negotiated with Lampert and his advisers.

Founded in the 19th Century, Sears built itself into an American institution with its famous mail-order catalogs in practically every middle-class home. Its Sears tower in Chicago was once the tallest building in the world.

When Lampert combined Sears and rival chain Kmart, the merged retailer had nearly 3,500 stores and employed more than 300,000 people — a workforce that shrank to 68,000 when it filed for bankruptcy.

Sears Holdings no longer has any operating Sears or Kmarts in the Corridor.

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