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Widely circulated news reports quote an un-named ESL spokesperson as stating, “[The bid] reflects our firm belief that there is a future for Sears as a smaller, less indebted retailer….Factoring for all considerations, we believe that our going concern bid provides the best path forward for the company, the best option to save tens of thousands of jobs and is superior for all of Sears’ stakeholders to the alternative of a complete liquidation.” The spokesperson continued, “Should our bid be accepted and succeed, we expect that the company that emerges from bankruptcy would offer employment to up to 50,000 associates, depending on any further actions the company may take between now and closing, and reinstate severance protections for eligible employees who accept their employment offer.”
The Wall Street Journal is reporting that (i) the $1.3bn financing commitment is from three financial institutions and that the banks, including Bank of America and Citigroup, have agreed to extend the maturity on $1bn of debt and (ii) that ESL has agreed to forgive or extend maturities on most of the Sears debt that it holds. The WSJ is also reporting that as part of the financing package, ESL and Cyrus Capital Partners LP will provide the Debtors with approximately $200 million in new financing to be backed by Sears properties.
On November 19, 2018, the Court approved “off-the-shelf” bidding procedures for “Go Forward Stores” [Docket No. 816] that established the December 28 bid deadline and which anticipates an auction date of January 14, 2109. The Debtors are also obligated to notify ESL, as well as any other bidders, as to whether a bid has “qualified” by January 4, 2018. In respect of further bids, the WSJ has reported that liquidation firms Tiger Capital Group LLC and Great American Group LLC have teamed up to place a liquidation bid; likewise Gordon Brothers Retail Partners LLC and Hilco Global Merchant Resources LLC have teamed up for a bid. Significantly, all four liquidation firms teamed up to liquidate all Toys “R” Us Inc. stores in the U.S. earlier this year.
The Court order provides the following schedule:
- December 28, 2018 – Bid Deadline for Go Forward Stores & Deadline to object to Stalking Horse Bid for Go Forward Stores;
- January 4, 2019 – Deadline for Debtors to notify Prospective Bidders of their status as Qualified Bidders and announcement of Auction Packages;
- January 10, 2019 – Proposed date of hearing on Stalking Horse Objections;
- January 14, 2019 – Auction for Go Forward Stores; and
- January 31, 2019 – Proposed date of Sale Hearing.
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