Sears should close for good, creditors say

It's time to pull the plug on Sears, according to its creditors.A committee of unsecured creditors sa...

Posted: Nov 12, 2018 2:45 PM
Updated: Nov 12, 2018 2:45 PM

It's time to pull the plug on Sears, according to its creditors.

A committee of unsecured creditors said in a court filing Friday that the company's plans to stay in business during bankruptcy are "nothing more than wishful thinking " and "an unjustified and foolhardy gamble with other people's money."

Banking, finance and investments

Bankruptcy

Business and industry sectors

Business figures

Business financial trouble

Business, economy and trade

Companies

Company activities and management

Eddie Lampert

Financial markets and investing

Financial performance and reports

Funds and investment trusts

Hedge funds

Insolvency and bankruptcy courts

Law and legal system

Law courts and tribunals

Real estate

Sears Holdings

The committee applauded the company's optimism for returning to profitability, but said the Sears recovery plan would run up additional losses without saving the company or the remaining jobs.

It said creditors who are owed money by Sears and whose debt is not backed by hard assets such as real estate or credit card balances, will pay for Sears' attempt to stay in business.

"Unfortunately, and notwithstanding desires to the contrary" staying in business "may no longer be an option" for Sears, the filing said.

Spokespeople for Sears and its chairman, Eddie Lampert, declined to comment.

The objections of the committee could be an important turning point in Sears' battle to stay in business.

The court has an obligation to protect creditors in a bankruptcy case, and a judge can approve a company's plans to stay in business only if convinced that will be the best way to repay money that the company owes.

Sears Holdings, which includes both the Sears and Kmart brands, filed for bankruptcy on October 15. It had 68,000 employees and nearly 700 remaining stores at the time of the filing.

Sears said it could use the bankruptcy process to cut costs, shed debt and restore itself to profitability. But it did warn that it was burning through about $125 million a month in cash, and its ability to remain in business was in doubt.

The company said it wanted to slim down to 400 profitable stores and sell the real estate associated with those stores to raise cash. But the creditors question whether such a plan is viable. It said only Lampert's hedge fund has expressed an interest in buying the real estate.

In an earlier filing, the committee speculated the series of deals between Lampert's hedge fund and Sears benefited him more than the company. Lampert's hedge fund responded that the deals were done only to give Sears every chance to survive, and that each can be defended as in the best interest of the company.

The creditors' most recent motion argues that any deal to sell the remaining stores to Lampert's hedge fund would not "withstand scrutiny" of the court.

Two of the nine members of the committee are mall owners. Simon Property Group (SPG) and Brixmor Property Group (BRX) have said they expect to be better off without Sears. Shares for both companies are up since Sears' bankrutpcy filing.

The creditor's committee is expected to meet with the company Monday. A hearing in the bankruptcy court is scheduled for Thursday to weigh some of the company's plans to stay in business.

The committee said it is hopeful that the company can present convincing data at Monday's meeting to show why staying in business makes sense, but it doesn't expect that to be the case.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 681613

Reported Deaths: 8076
CountyCasesDeaths
Hennepin1403921855
Ramsey58542944
Dakota52093497
Anoka48037479
Washington30637309
Stearns24839240
St. Louis20269335
Scott19626145
Wright18499163
Olmsted15792110
Sherburne13522100
Carver1206952
Clay915295
Rice9104120
Blue Earth866347
Crow Wing7797102
Kandiyohi744188
Chisago711658
Otter Tail666691
Benton6439101
Mower558038
Winona554452
Goodhue550080
Douglas535484
Itasca516671
Beltrami504672
McLeod501463
Steele500921
Isanti490170
Morrison467563
Nobles448650
Becker434559
Polk433675
Freeborn429538
Lyon394254
Carlton389559
Nicollet377647
Pine373726
Mille Lacs354360
Brown346443
Cass343035
Le Sueur340829
Todd321734
Meeker304749
Waseca288625
Martin261933
Wabasha24334
Dodge24064
Hubbard232241
Roseau231723
Houston203816
Renville199548
Redwood198242
Fillmore194710
Pennington190221
Wadena185126
Faribault179725
Cottonwood176624
Sibley175810
Chippewa171239
Kanabec164129
Aitkin155038
Watonwan155011
Rock138519
Jackson134712
Pope13058
Yellow Medicine125120
Pipestone125026
Swift117119
Koochiching116519
Murray115110
Stevens112211
Marshall103518
Clearwater101918
Lake91021
Wilkin89614
Lac qui Parle84824
Big Stone6814
Mahnomen6819
Grant6718
Lincoln6524
Norman6509
Kittson53322
Unassigned51593
Red Lake4777
Traverse4215
Lake of the Woods3884
Cook2120

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 432122

Reported Deaths: 6339
CountyCasesDeaths
Polk67341672
Linn25698353
Scott22828261
Black Hawk19121334
Woodbury16940233
Johnson1659690
Dubuque14547218
Pottawattamie13058183
Dallas12746102
Story1187148
Warren685993
Webster6304102
Cerro Gordo6212102
Clinton620097
Des Moines594482
Muscatine5781108
Unassigned57410
Marshall564280
Sioux542775
Jasper516575
Lee511078
Wapello4993128
Buena Vista472942
Marion449083
Plymouth434083
Henry339940
Jones331158
Bremer325365
Crawford321644
Carroll317053
Washington315754
Benton312656
Boone308736
Mahaska275453
Dickinson270846
Kossuth251471
Jackson246044
Clay245729
Tama238273
Delaware234643
Buchanan233938
Hardin230847
Page221624
Cedar220525
Fayette220345
Wright217641
Winneshiek215937
Hamilton211752
Harrison198875
Clayton194458
Madison193820
Butler188836
Floyd187742
Mills185224
Poweshiek181036
Cherokee179440
Iowa176425
Allamakee176252
Lyon174441
Jefferson169138
Calhoun168313
Hancock167335
Winnebago164231
Grundy158835
Cass155556
Louisa154949
Shelby151739
Appanoose151249
Emmet149541
Franklin148524
Humboldt147226
Sac144722
Union144237
Mitchell141643
Guthrie138132
Chickasaw137518
Palo Alto131124
Clarke125024
Montgomery122239
Keokuk116232
Howard115622
Monroe114033
Ida107538
Davis103125
Pocahontas99023
Greene98012
Adair95334
Monona94733
Lucas94523
Worth9268
Osceola83717
Decatur74510
Fremont74111
Taylor72412
Van Buren70919
Wayne65123
Ringgold62226
Audubon58414
Adams3914
Rochester
Cloudy
58° wxIcon
Hi: 79° Lo: 58°
Feels Like: 58°
Mason City
Cloudy
58° wxIcon
Hi: 79° Lo: 57°
Feels Like: 58°
Albert Lea
Cloudy
55° wxIcon
Hi: 78° Lo: 56°
Feels Like: 55°
Austin
Cloudy
59° wxIcon
Hi: 79° Lo: 58°
Feels Like: 59°
Charles City
Cloudy
57° wxIcon
Hi: 81° Lo: 58°
Feels Like: 57°
Sunny and cooler on Tuesday
KIMT Radar
KIMT Eye in the sky

Community Events