Sears Holdings Corp is readying plans for a liquidation after Chairman Eddie Lampert’s bid to pull approximately 425 stores out of bankruptcy was rejected, according to Bloomberg, citing people familiar with the matter.
Lampert offered a $4.6 billion package backed by lenders Bank of America and Citigroup, as well as a new participant in the deal – Royal Bank of Canada. The three institutions offered to provide a $950 million basset-backed loan and $350 million revolving line of credit to back Lampert’s bid, which would secure the jobs of roughly 50,000 workers of the company’s 68,000.
According to Bloomberg‘s sources, there were gaps in Lampert’s financing package and the plan would not have provided enough cash to cover bankruptcy-related costs. It also undervalued inventory and other assets compared to what liquidators were promising to pay.
Part of Lampert’s bid relied on the forgiveness of $1.3 billion of Sears debt held by his hedge fund, ESL Investments Inc.
The retailer started laying the groundwork for a liquidation after meetings Friday in which its advisers weighed the merits of a $4.4 billion bid by Lampert’s hedge fund to buy Sears as a going concern, said the people, who asked not to be identified because the discussions are private. If the 125-year-old retailer does die in bankruptcy — like Toys “R” Us in 2018, and Borders Group Inc. in 2011 — it would mark the largest fatality yet in the retail apocalypse prompted by a shift to online shopping. –Bloomberg
Sears sold off the Craftsman brand to Black and Decker. They are now made in China, so baby those old Craftsman tools – I think they’re honoring the warranty, but the replacement tools you get will be garbage compared to the American-made Craftsman tools (which were made by Apex, also makes Gear Wrench tools).
“Wall Street bloodsucker drains Sears dry.” should be the headline.
Lampert is a Goldman Sachs alumni and was mentored by Robert Rubin, in case there is any question in your mind.
Never was a question-Romney prob was hoping he would get some of the loot, maybe he did as he did these crimes himself so well.
Does this mean that my Craftsman tools no longer have a lifetime guarantee?
Sears sold off the Craftsman brand to Black and Decker. They are now made in China, so baby those old Craftsman tools – I think they’re honoring the warranty, but the replacement tools you get will be garbage compared to the American-made Craftsman tools (which were made by Apex, also makes Gear Wrench tools).
FYI, Apex was purchased by Bain Capital (see also Mitt Romney) in 2012 [ https://www.bloomberg.com/news/articles/2012-10-10/danaher-to-sell-apex-tool-group-for-1-6-billion-to-bain-capital ], and I think has moved their production to China – which is why their newer tools are such complete shit compared to the old ones.
ace hardware carries craftsman hand tools & you can exchange them there–
yard tools,i think we’re probably screwed–
You have the same guarantee on your Craftsman tools as you did when you bought them.
Their word.
Craftsmen now has the same warranty as the USA….full faith on your part…but no credit will be given .
Crapsmen.
I understand all the executives will receive substantial bonus’s before they close the doors.