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: 604758

Reported Deaths: 7648
CountyCasesDeaths
Hennepin1250271781
Ramsey52525898
Dakota46864471
Anoka42797458
Washington27437291
Stearns22563225
St. Louis18145314
Scott17554138
Wright16385149
Olmsted13406102
Sherburne1202895
Carver1067648
Clay826592
Rice8207110
Blue Earth762944
Crow Wing681995
Kandiyohi668485
Chisago620752
Otter Tail586484
Benton583098
Goodhue484074
Douglas475881
Mower470533
Winona461452
Itasca460263
Isanti440364
McLeod431261
Morrison424862
Beltrami408062
Nobles407850
Steele397817
Polk389072
Becker386755
Lyon363953
Carlton353056
Freeborn347133
Pine334923
Nicollet331345
Mille Lacs311854
Brown308040
Le Sueur297426
Cass286532
Todd285733
Meeker263643
Waseca238023
Martin235333
Roseau211221
Wabasha20793
Hubbard196641
Dodge18783
Renville182846
Redwood176639
Houston174616
Cottonwood167124
Wadena163423
Fillmore157610
Faribault155319
Chippewa153938
Pennington153820
Kanabec146828
Sibley146710
Aitkin138937
Watonwan13579
Rock128719
Jackson122812
Pipestone116726
Yellow Medicine115020
Pope11306
Murray107110
Swift106918
Koochiching95618
Stevens92511
Clearwater89016
Marshall88817
Lake83220
Wilkin83213
Lac qui Parle75622
Big Stone6044
Grant5948
Lincoln5853
Mahnomen5669
Norman5479
Kittson49022
Unassigned47793
Red Lake4017
Traverse3775
Lake of the Woods3453
Cook1720

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 371318

Reported Deaths: 6059
CountyCasesDeaths
Polk58281641
Linn21248339
Scott20311248
Black Hawk16200312
Woodbury15240230
Johnson1462685
Dubuque13517211
Dallas1129399
Pottawattamie11233174
Story1071948
Warren584091
Clinton561593
Cerro Gordo554297
Sioux517774
Webster516594
Muscatine4883106
Marshall488076
Des Moines468172
Wapello4340122
Buena Vista427140
Jasper421273
Plymouth403281
Lee382557
Marion366176
Jones301157
Henry294937
Bremer288861
Carroll287052
Boone268534
Crawford268440
Benton260455
Washington257251
Dickinson249344
Mahaska232651
Jackson225242
Clay216727
Kossuth216166
Tama212371
Delaware211143
Winneshiek198935
Page194522
Buchanan194233
Cedar192323
Hardin187444
Fayette187143
Wright186140
Hamilton182051
Harrison180073
Clayton171257
Butler166535
Madison164619
Mills163924
Floyd163542
Cherokee159438
Lyon159241
Poweshiek157136
Allamakee152952
Hancock150334
Iowa149924
Winnebago144531
Cass139255
Calhoun138813
Grundy137533
Emmet135741
Jefferson133435
Shelby131837
Sac130920
Union130135
Louisa129649
Appanoose129049
Mitchell126743
Chickasaw124917
Franklin123523
Guthrie123332
Humboldt119626
Palo Alto113523
Howard105122
Montgomery103638
Clarke101124
Keokuk97032
Monroe96431
Unassigned9570
Ida91635
Adair87532
Pocahontas85822
Davis85325
Monona83631
Osceola78917
Greene78111
Lucas77923
Worth7628
Taylor66812
Fremont6279
Decatur6169
Ringgold56424
Van Buren56418
Wayne54423
Audubon53411
Adams3454
Rochester
Partly Cloudy
84° wxIcon
Hi: 92° Lo: 72°
Feels Like: 86°
Mason City
Clear
82° wxIcon
Hi: 88° Lo: 72°
Feels Like: 84°
Albert Lea
Partly Cloudy
81° wxIcon
Hi: 89° Lo: 73°
Feels Like: 83°
Austin
Partly Cloudy
82° wxIcon
Hi: 90° Lo: 71°
Feels Like: 87°
Charles City
Partly Cloudy
81° wxIcon
Hi: 87° Lo: 70°
Feels Like: 85°
Rain chances through the weekend
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

First at Four Live at Rochesterfest

Image

First At Four Live At Rochesterfest

Image

Rochesterfest food vendors return

Image

New art installed in Rochester parks

Image

Katie interview with Brandon Helgeson

Image

Olmsted County friendly for older people

Image

Ryan's Evening Forecast (6/24/21)

Image

Concerns Over Carnival

Image

Antiviral Pill: Help Prevent The Virus From Spreading

Image

Sean's Weather 6/24

Community Events