Retail Dive reports:
After years of speculation and financial losses, Sears is contacting banks to arrange the financing for a possible Chapter 11 filing, which might come as soon as this week, according to reports in The Wall Street Journal, which broke the story, and CNBC, that both cited unnamed sources.
The report comes as Sears faces a $134 million debt payment due Oct. 15 that ESL Investments, the hedge fund controlled by Sears CEO Eddie Lampert, described as among the retailer’s “significant near-term liquidity constraints” in a recent proposal that would restructure some debt and transfer Sears assets to ESL.
Just about any other retailer in the country with Sears’ debt load and profit losses would have fallen into Chapter 11 years ago. But not every retailer has the advantage of being controlled by a hedge fund mogul determined to keep it out of bankruptcy by loaning it money out of his own fund.
Sears was once the largest private employer in the United States. Parent company Sears Holdings currently has 140,000 employees at its 866 Kmart and Sears locations.