Reuters has reported that chairman Eddie Lampert submitted a revised takeover bid for the company.
In a concession, Lampert agreed to assume tax and vendor bills Sears has incurred since filing for bankruptcy protection in October, according to unnamed sources. The revised bid was submitted through an affiliate of Lampert’s hedge fund, ESL Investments, on Wednesday afternoon along with a $120m deposit, the sources added.
The new bid, which Sears will consider during a bankruptcy auction on 14th January, proposes assuming up to about $300m of tax and merchandise expenses the company has racked up since its October bankruptcy filing, the sources said.
The offer, which aims to preserve up to 50,000 jobs, also would assume up to roughly $350m in additional Sears bankruptcy expenses, severance benefits for employees and other liabilities, one of the sources added. Sears employed about 68,000 people when it filed for bankruptcy.
Ensuring Sears can pay its expenses, which include bills for legal and financial advisers and are known as administrative claims, was a main point of contention as the company negotiated the deal with Lampert.
Lampert’s revised bid is the only one that envisions keeping Sears alive, albeit in a smaller form, and was made just hours before a scheduled bankruptcy court hearing on Tuesday.
The agreement required Lampert to make a $120m deposit, more than $17m of which he will forfeit to Sears creditors unless his bid prevails in next week’s bankruptcy auction.
Lampert’s current bid for Sears still faces hurdles that could eventually threaten his attempt to acquire the chain. His previous offers requested a legal release that would clear him from exposure to litigation over transactions he engaged in with Sears before it filed for bankruptcy protection.
Unsecured creditors, including landlords and bondholders, have argued there are viable claims against Lampert regarding the deals, which Lampert maintains were proper. The transactions helped him become the company’s largest creditor in addition to its biggest shareholder.
Lampert has also proposed forgiving $1.3b of debt he holds in exchange for ownership of a restructured Sears, a bankruptcy manoeuvre known as a credit bid. Unsecured creditors have previously argued the move should not be allowed.
Sears and ESL declined to comment.