Report: Sears Hires Bankruptcy Professionals

Report: Sears Hires Bankruptcy Professionals

Sears Holdings Corporation, the parent of Sears and Kmart, is considering filing for bankruptcy protection as soon as this week as it faces a large debt repayment on Monday, reports The Wall Street Journal.

The company has hired advisory firm M-III Partners LLC to prepare the bankruptcy filing, although the retailer is continuing to consider other options to avoid insolvency, the report said. Sears is facing a debt repayment of $134 million on Monday, although one option would be for its CEO, the billionaire investor Edward Lampert, to make the payment and rescue the company from bankruptcy, the Journal noted.

On Tuesday, Sears Holdings Corporation added Alan Carr, CEO of restructuring advisory firm Drivetrain, to the company’s board of directors.

In a statement, Sears said Carr has significant experience as a principal, investor and advisor leading complex financial restructurings as well as serving as a director of reorganized businesses in the U.S. and Europe. Carr was previously an attorney at Skadden, Arps, Slate, Meagher & Flom LLP and Ravin, Sarasohn, Baumgarten, Fisch & Rosen.

Lampert said in a statement: “Alan brings deep experience as a director for companies that went through complex organizational change. We are pleased to welcome him to the Board and look forward to the benefit of his expertise as we work to maximize value for the company and its stakeholders.”

On September 25,  Lampert’s hedge fund in a regulatory filing called on Sears’ board to sell $1.5 billion more in real estate and restructure $1.1 billion in debt in order to stave off a bankruptcy filing.

Sears, which was the world’s largest retailer in the 1960s, has been struggling in recent decades.

In May, Sears said it plans to shut 72 locations by the end of third quarter to stem losses in the face of deepening financial distress.

Sears has closed nearly 400 stores since last year. It operates a network of stores with 866 full-line and specialty retail stores in the United States as of Aug. 4, operating through Kmart and Sears.

Lampert acquired Kmart in 2003 when the retailer emerged from bankruptcy and bought Sears a year later. At the time of the Sears acquisition, the combined company had 2,353 full-line and off-mall stores and about 1,100 specialty stores.