In a development that is said to prevent Sears Holdings Corp. from closing all of its locations, Edward Lampert has reportedly won a bankruptcy court auction for the retailer. The hedge fund executive is said to have had negotiations with the retailer’s creditors and board that took place over multiple days, The Wall Street Journal reported.
The effort is said to have prevailed over a bid from Abacus Advisory Group LLC that would have shuttered the retailer’s locations as well as sold its inventory. Lampert’s plan, however, is said to keep approximately 400 locations in operation. Even so, a bankruptcy judge in White Plains, N.Y. reportedly has to approve the plan. However, some creditors would rather have the retailer completely liquidate.
The news comes a few days after it was reported that a special committee for the retailer had planned to consider a revamped bid from Lampert’s hedge fund, ESL Investments, prior to the company’s bankruptcy auction on Jan. 14. The comments were said to have come during a hearing in bankruptcy court on Tuesday (Jan. 8).
A spokesperson for ESL had previously said, according to reports, “as we have said before, our proposal provides substantially more value to stakeholders than would be the case in liquidation, and is the only option to save an iconic American retailer and up to 50,000 jobs. We believe in Sears and will continue to do everything we can to ensure that it has a profitable future.”
The comments of the committee come after “round-the-clock negotiations” that occurred over multiple days. It was reported at the time that a revamped bid was for around $5 billion, and Lampert is said to take on vendor and tax bills that the retailer was subject to as of its bankruptcy in October. In addition, it was reported that a portion of a deposit — $17.9 million — was not refundable.