Sears sale hearing to be held Feb. 4; committee expected to object

By Caroline Salls

Pittsburgh, Jan. 24 – The hearing for approval of the $5.2 billion sale of Sears Holdings Corp.’s assets to ESL Investments, Inc. will be held on Feb. 4, according to an 8-K filed Thursday with the Securities and Exchange Commission.

A statement released last week indicated that the sale hearing would be held on Feb. 1.

Thursday’s filing said the company will try to obtain court approval of the sale by Feb. 8, with the sale expected to close by Feb. 19.

As previously reported, the assets being purchased include Sears’ “go-forward stores,” which Sears said in the 8-K includes roughly 425 retail stores under the Sears and Kmart brands and some related real estate interests.

ESL will also purchase up to $17 million of cash held at the retail stores in question.

The purchase price is comprised of cash equal to $1.4 billion, plus up to $17 million for store cash, plus a $35 million credit bid release consideration, minus the total amount of a credit bid related to the outstanding obligations under a first-in, last-out facility, plus the amount of a credit bid related to $433.45 million in second-lien obligations, plus any FILO facility buyout amount.

The purchase price also includes a credit bid related to an IP/ground-lease term loan facility, the FILO facility, a 2020 real estate loan and the second-lien obligations, as well as debt or equity securities in the buyer in an amount and form to be determined, satisfaction of all junior debtor-in-possession term loan obligations, satisfaction of Citi letter-of-credit facility obligations and the assumption of seller liabilities.

The purchase agreement also states that ESL will provide offers of employment to 45,000 Sears employees and through Feb. 1, 2020, provide salary continuation and comparable benefits, as well as reinstatement of the company’s pre-bankruptcy severance program for all employees that accept the employment offer at the sale closing.

The company said in the 8-K that it has been informed that the official committee of unsecured creditors appointed for its Chapter 11 case intends to object to the proposed sale at the hearing.

Sears is a retailer based in Hoffman Estates, Ill. The company filed bankruptcy on Oct. 15, 2018 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 case number 18-23538.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.