Bankruptcy judge gives Sears another chance to survive

Eddie Lampert just cleared a big hurdle in his bid for Sears

"Lampert. stripped Sears of key assets and spent $6 billion on stock buybacks, while destroying 250,000 jobs and enriching himself and his investors in the process", United For Respect, a nonprofit representing retail workers, said in a statement.

Drain's ruling went against creditors owed more than $3 billion by Sears.

Lampert gave up his CEO title after filing for bankruptcy a year ago but he believed that the company can still get back up and do well.

Drain said Lampert was "subject to substantial verbal abuse" during the proceedings, noting that critics had characterized the Sears chairman in ways that evoked a ruthless robber baron and a blowhard sitcom character. It included a point-by-point rebuttal of the creditors arguments.

Drain's decision capped three days of hearings. He said dumping so many stores and other assets onto the market at the same time would reduce the amount of money that would be raised in liquidation.

"A clear communications process with vendors and employees is really warranted", Drain said. Although Drain did not have jurisdiction to decide the issue, he gave an advisory opinion in favor of Sears' claim that ESL is responsible for those liabilities.

Lampert's plan was opposed by a committee of unsecured creditors skeptical that Hoffman Estates-based Sears will be any more successful after exiting bankruptcy. He predicted more store closings and job losses ahead. "But sometimes it's the better result".

At the hearing Thursday morning, Pension Benefit Guaranty Corp., the federal pension watchdog, dropped its objection to Sears' sale.

Lampert left and Sears CEO Alan Lacy

The most serious issue left to be decided is how much of the $166 million in accounts payable Lampert and his hedge fund ESL are willing to assume.

James Bromley, ESL's attorney, said the disagreement can be settled in future negotiations after the deal closes.

A store closing sale sign is posted next to a Sears logo in New Hyde Park, New York, on October 10, 2018.

But it has struggled for decades, losing business not only to online rivals but also to big box retailers who offered lower prices and a wider selection of goods. Lampert, through his hedge fund, ESL Investments, presented the only bid for the company to keep it afloat, according to Reuters. The government pension insurer is taking over the company's underfunded pension plans.

Sears has made it out alive.

"The reality, as we know from our lived experience, is that Lampert has been putting the company through the longest liquidation in retail history".

When Lampert combined Sears and rival chain Kmart, the merged retailer had almost 3,500 stores and employed more than 300,000 people, a work force that shrank to 68,000 when it filed for bankruptcy.

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