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article imageWithout financing, path to liquidation begins at 4 pm for Sears

By Karen Graham     Dec 28, 2018 in Business
Sears is nearing a crucial deadline that could determine whether it survives. The company set Friday at 4 p.m. as the deadline for potential buyers to bid for Sears' assets. Without financing, Sears and KMart are on the path to liquidation.
Sears has a history that stretches back to 1886. It was the pioneering department store that sold all things to all people and by the mid-twentieth century, Sears had built a vast empire that stretched across North America.
But the rise of Amazon and other e-commerce companies was too much for the iconic name that represented a different time in our history, and Sears ended up closing hundreds of outlets in recent years. On Monday, October 15, drowning in debt, the company filed for bankruptcy.
"The Company and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York," a statement by Sears Holdings Corporation said.
Friday's 4 p.m. deadline
Edward S. Lampert, Chairman of Sears Holdings, has put forth a $4.6 billion proposal to buy the company out of bankruptcy through his hedge fund, ESL Investments, according to CNBC. Actually, according to sources, ESL is the only party that has offered to buy Sears as a whole.
Without ESL or a similar offer, the company could be bought and split up into pieces. Lambert says his plan would let 50,000 of about 68,000 Sears employees keep their jobs. He is not putting up a lot of cash, though. Instead, he is offering to forgive about $1.8 billion of the debt he holds from Sears, reports CNN News.
So far, Lambert has neither submitted his bid nor rounded up financing prior to the deadline. If the deadline is missed, the company has the option of extending it—or, as some creditors would prefer, it could begin the process of closing down all of its stores and liquidating its assets.
Many creditors have called Lampert's proposed bid, which would be largely funded through debt forgiveness, a "foolhardy gamble with other people's money."
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