The Sears Tailspin Has Some Liquidators Sharpening Their PencilsThe appointment of a trustee if Sears files a Chapter 7 is expected to result in a messy and lengthy legal process.

[Collection]The tailspin at Sears Holdings Corp. is getting more dire by the day as talks begin to surface of lenders pushing for a Chapter 7 liquidation. One executive at a liquidation firm summed up the crisis as follows: “This isn’t just a Chapter 11 bankruptcy with hopes of a reorganization. Whenever there’s talk about a Chapter 7 filing, that is very drastic. It means [the lenders] want to throw out management.” According to this liquidation executive, the vote of no confidence can be attributed to Sears chairman and chief executive officer Edward S. Lampert. “Many people don’t like him. They think that he doesn’t care about putting people out of work,” he said. This individual was referring to the 3,500-plus stores in existence under the Sears and Kmart nameplates in 2005 when Lampert merged Kmart with Sears, Roebuck & Co. in a transaction valued at $11 billion, with projections of annual volume of $55 billion. The last profitable quarter Sears posted was in 2010. Today it operates fewer than 866 locations. In the last few years, the company has been closing stores by the hundreds. While a perfect storm comprising the 2007 financial crisis and a shift in consumer shopping habits to online has

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