A U.S. bankruptcy judge on Thursday, February 7, 2019, approved Sears Holdings Corp Chairman Edward Lampert’s USD 5.2 billion takeover of the beleaguered retailer, allowing the department store chain to avert liquidation and preserve tens of thousands of jobs.
Judge Robert Drain approved the sale after a hearing spanning several days in a White Plains, N.Y., federal bankruptcy court. He overruled objections, including from an unsecured creditors committee, which said the process for selling Sears was unfair to them and argued for a liquidation.
Lampert, who arranged an USD 11 billion merger between Sears and discounter Kmart in 2005 and tried for years to boost business, wins another chance to try to revive what once was the biggest U.S. retailer.
Lampert, the only bidder offering to keep Sears alive through his hedge fund, ESL Investments Inc, agreed to a deal for 425 stores after round-the-clock negotiations in January. The takeover aims to preserve about 45,000 jobs.
“I conclude that the process here was proper and appropriate,” Drain said in his reasoning for approving the sale.
Terms of the sale allow for some litigation to continue against Lampert and ESL.
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.
“He is a wealthy individual and a big boy and I guess he can take it,” Drain said, adding that some of the abuse may have been justified.
Sears Chief Restructuring Officer Mohsin Meghji and company directors Bill Transier and Alan Carr were among those questioned on a witness stand during the court hearing on Lampert’s offer.
Lampert stepped down as CEO when Sears filed for bankruptcy Oct. 15, though he remained the retailer’s chairman, largest shareholder and creditor. A restructuring committee of independent directors negotiated with Lampert and his advisers.