Sears could announce plan to liquidate as soon as Tuesday

A Sears sign is displayed at a store on Oct. 15 2018 in the Brooklyn borough of New York City

A Sears sign is displayed at a store on Oct. 15 2018 in the Brooklyn borough of New York City

Judge Robert Drain still needs to approve the agreement, but called the deal "a good development".

It also closes the curtain on Kmart, which is owned by Sears Holdings.

Parent company Sears Holding Corporation is due in bankruptcy court Tuesday and reports from Reuters and others indicate they will ask to proceed with liquidation.

Sears received another lifeline Tuesday when the company's chairman and largest shareholder promised to line up the necessary financing to keep the struggling department store chain afloat. It is still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering.

Sears filed for bankruptcy in October, but said it hoped to be able use the process to stay in business.

Lampert entered the bid through Transform Holdco LLC, an affiliate of his private equity firm, ESL Investments Inc. Lampert's hedge fund, ESL Investments, will now be required to pay a $120 million deposit by 4 p.m. Wednesday. After several days of "virtually round-the-clock negotiations", Sears agreed to compare a revised version of Lampert's bid at the bankruptcy auction, Schrock said. It is known he expects the new Sears to borrow $1.3 billion from three leading banks.

Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does.

Even though no other bidders stepped forward, Sears Holdings' board decided the offer wasn't good enough since almost a quarter of it was in the form of debt forgiveness. The creditors' attorneys question whether the terms of those loans unduly benefited Lampert and his hedge fund rather than Sears.

The chairman and CEO of Berkshire Hathaway warned 13 years ago, during a conversation he had in 2005 with students from the University of Kansas, that Sears Chairman Eddie Lampert's venture in merging Sears and Kmart was unlikely to succeed, as first reported by Business Insider.

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