Call Today for a FREE Consultation
New Mexico Lawyers Serving New Mexico's Legal Needs Since 1997

Despite Lampert’s efforts, Sears files for Chapter 11

On October 15, after more than 130 years in business, former retail giant Sears filed for Chapter 11 bankruptcy protection in the face of mounting debt and shrinking profits. In a post earlier this month, we discussed now-former CEO Eddie Lampert’s plan of leveraging his hedge fund, ESL Investments, and other resources to raise capital and avoid a filing. In spite of those efforts, however, the highly anticipated filing occurred.

The Chapter 11 filing asks for fast bankruptcy court approval of a debt management scheme that would involve closing dozens more unprofitable stores (in addition to the hundred-plus stores already slated for closure), refinancing some of the company’s massive debt, and hopefully taking advantage of a successful holiday shopping season to increase capital.

The store has effectively been hemorrhaging money, having lost approximately $11 billion since 2011. The company now has assets worth nearly $7 billion and debts in excess of $11 billion. The company’s bankruptcy filing indicates a desire to reorganize the company around its remaining 400 profitable stores or sell those stores to someone who will operate them under the Sears name.

The company said in a statement that they arranged $300 million worth of debtor-in-possession financing, and are in negotiations with Lampert’s hedge fund, ESL Investments, to seek an additional $300 million in operating capital.

Sears began back in 1886 as a watch company and eventually grew to an eponymous business, outlasting such retailers as Montgomery Ward to eventually have thousands of stores and nearly 200,000 full-time employees around the world. Those numbers have shrunk dramatically already, and the bankruptcy means that the number of stores and workers will continue to fall. Right now, the company has only 32,000 full-time employees.

No Comments

Leave a comment
Comment Information

Watch our videos to learn of the many ways we can help you with your legal needs.

Email Us For A Response

How can We Help You?

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Locations

Firm Location:

Giddens & Gatton Law, PC
10400 Academy Road NE
Suite 350
Albuquerque, NM 87111

Phone: 505-273-3720
Fax: 505-271-4848
Map & Directions

Firm Numbers:

  • linkedin
  • gplus
Review Us