Eddie Lampert was given an additional day to place a bid for Sears after the retailer rejected his $4.4 billion bid to save the company, according to CNBC. The initial offer had been deemed sufficient by Sears’ advisors, but was also found “administratively insolvent” due to falling short in covering vendor fees and payments, people familiar with the matter told CNBC and Reuters.
Lawyers for ESL Investments, Lampert’s hedge fund, had protested the rejection by highlighting the costs associated with Sears' bankruptcy advisors, a person familiar with the situation told CNBC. ESL will be required to pay a $120 million deposit by 4 pm on Jan. 9 to rectify the matter. Doing so will allow Lampert’s offer to stand against those of liquidators during the auction Sears has planned for Jan. 14.
Prior to the extension, the retailer had been planning for a separate February auction of its assets and real estate. Lampert still planned to make a bid for some of those assets if his efforts to stave off liquidation failed, according to the sources. However, Sears’ time as a significant retail player may already be over regardless of either auction’s outcome.
“There’s nothing there to reconstitute,” said Anne Brouwer, Senior Partner at McMillan Doolittle in an interview with Retail TouchPoints. “The most valuable parts of the company are no longer exclusive to Sears. The real estate doesn’t mean much, and in many cases that real estate is being repurposed — some of those locations have been torn down and are being rebuilt. Additionally, I suspect that there’s going to be a huge challenge, because if [Lampert’s] bid isn’t sufficient, this could be another Toys ‘R’ Us situation for all his creditors.”