Sears Holdings Corp will ask a bankruptcy judge on Tuesday if it can proceed with liquidation after it could not reach an agreement on Chairman Edward Lampert’s $4.4 billion takeover bid, casting doubt on the survival of the 126-year-old U.S. department store chain, people familiar with the matter said.
Should Sears liquidate its assets, it would become one of the most high-profile victim in the wave of bankruptcies that has swept the retail sector in the last few years, as the popularity of online shopping exacerbates the fierce price competition facing brick-and-mortar stores.
Sears, which filed for bankruptcy protection last October, may have to close hundreds of stores it is still operating, potentially putting up to 68,000 people out of work, the sources said. Its vast inventories of tools, appliances and store fixtures will be sold in fire sales, the sources added.
Lawyers for Lampert and his hedge fund, ESL Investments Inc, also plan to present details of his offer and make the case for renewing efforts to save Sears in bankruptcy court on Tuesday, the sources said.