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Exclusive: Sears Chairman Lampert is seeking Partner for Bankruptcy Financing – Sources

(Reuters) – Sears Holdings Corp. SHLD.O ) President Eddie Lampert is in discussions with at least one potential partner to…

(Reuters) – Sears Holdings Corp. SHLD.O ) President Eddie Lampert is in discussions with at least one potential partner to contribute to a $ 300 million bankruptcy loan that American retailers seek, people who are familiar with the case said on Sunday.

PHOTO PHOTO: A picture of a Sears store at Fair Oaks Mall in Fairfax, Virginia, January 7, 201

0. REUTERS / Larry Downing / File Photo

Lampert Hedge Fund, ESL Investments Inc., has had discussions with Cyrus Capital Partners LP , an investment firm that holds part of Sears’s existing debt, sharing the burden of financing part of the $ 300 million loan, which would be separate from another $ 300 million loan Sears Bank offered to provide, said the sources.

The sources were not identified because the deliberations are confidential. A Sears spokesman did not respond to a request for comments on Sunday.

Sears survival is due to the willingness of lenders and suppliers to keep the company floating. Strong sales during the season season will be crucial in determining it, which implies pressure on the department store’s operator to ensure sufficient funding to be in operation until then.

Through its hedge fund, Lampert has invested billions of dollars in Sears since he created it in its current form in 2005 through a merger with Peer Kmart. As a result, he is the department store’s largest shareholder and creditor.

Bank Bankruptcy, including Bank of America Corp. (19459016) BAC.N ), Wells Fargo & Co. ( WFC.N ) and Citigroup Inc ( CN ) primarily apply for repayment in Sears bankruptcy, while the $ 300 million loan that Sears applies for from lenders including ESL would be refunded afterwards.

Some people representing Sears while browsing bankruptcy have also proposed to Lampert that he should try to replace the $ 300 million loan from the banks with own funding, said some of the sources. This would mean that Lampert could contribute to $ 600 million bankruptcy loans, telling the sources.

Such a move would potentially consolidate Sears’s obligations during bankruptcy proceedings and give Lampert greater control of the company’s case law because he would basically be the principal so-called debtor’s proprietor, said the sources. As it is now, Sears is considering having two such loans.

However, it is not clear if Lampert can or is willing to provide funding to repay banks’ lending Sears money bankrupt, the sources said. Lampert can break the mind and continue focusing on contributing to the $ 300 million loan. Sears wants it to be subject to repayment to the banks, says the sources.

The sources warned that negotiations between Sears, Lampert and other potential sources of bankruptcy funding were liquid and may not result in an agreement. Sears left bankruptcy in White Plains, New York on October 15, with a plan to close about 142 of its 700 stores at year-end and sell up to 400 of their most successful stores at an auction in January to a buyer who will hold them operational.

Lampert went down as Sears CEO after the bankruptcy proposals and plans to offer the boutiques for sale.

Sears, which has nearly 70,000 employees, has not won any profit since 2011. It struggled with competition from e-commerce companies like Inc. ( AMZN.O ), as well as brick-and- mortar dealers such as Walmart Inc ( WMT.N ).

The company listed $ 6.9 billion in assets and $ 11.3 billion in debt filed in the United States bankruptcy court in southern New York. A court hearing completion bankruptcy fund for Sears is expected during the week of 29 October.

Reporting by Mike Spector and Jessica DiNapoli in New York; editing by Greg Roumeliotis and Grant McCool

Our Standards: Thomson Reuters Trust Principles.

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