Sears Holdings – Seeks Approval for Off-the-Shelf Bidding Procedures, Sets Timetable for Sale of “Go Forward Stores”

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November 1, 2018 – Sears Holdings requested Court approval of global bidding and sale procedures [Docket No. 429]. The Court document explains, “By this Motion, the Debtors seek approval of global bidding and sale procedures (the ‘Global Bidding Procedures’) for the efficient marketing, auction and sale of their assets in an orderly and value maximizing manner.…To be clear, the proposed procedures are not a declaration by Sears to liquidate the Company at fire sale prices—far from it. On the contrary, the proposed procedures are intended to provide the Debtors an efficient mechanism to monetize assets as and when the Debtors decide to auction and sell their Assets, with the advice of their advisors and in consultation with the DIP ABL Administrative Agent and Co-Collateral Agents (the ‘DIP ABL Agents’) and the official committee of unsecured creditors (together the ‘Consultation Parties’)….Under the debtor-in-possession financing agreement (the ‘DIP ABL Credit Agreement’), the Debtors must satisfy milestones (the ‘DIP Milestones’) for the sale of their stores that are capable of continuing as a going concern (the ‘Go Forward Stores’). Specifically, the DIP Milestones require: 

a. On or before December 15, 2018, the Debtors must obtain a non-contingent and fully-financed (with committed financing containing customary limited conditionality consistent with acquisition financing commitments) stalking horse bid for the sale of the Go Forward Stores that is reasonably acceptable to the DIP ABL Agents; 
b. The Court shall have entered the bidding procedures order by January 14, 2019; 
c. The Debtors shall commence an auction for the sale of the Go Forward Stores on or before February 2, 2019;  
d. The Debtors shall obtain an order approving the sale of the Go Forward Stores pursuant to section 363 of the Bankruptcy Code on or before February 4, 2019; and  
e. Closing of the sale of the Go Forward Stores by no later than February 8, 2019.” 
The following timeline is fixed:

  • November 15, 2018 – Hearing to consider approval of Global Bidding Procedures and entry of Bidding Procedures Order; 
  • December 15, 2018 – Deadline for Debtors to designate Stalking Horse Bidder for Go Forward Stores; 
  • 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; and
  • January 31, 2019 – Proposed date of Sale Hearing.

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