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After 125 Years, Sears Has Just Hours To Avoid ‘Liquidation’

After 125 years as one of America’s most recognizable and profitable companies, Sears has just a few hours to secure financing to buy the company out of bankruptcy or it will be forced to begin the process of liquidating its assets and laying off its 68,000 employees, CNBC reports.

After filing for bankruptcy on October 15, Sears executives have been scrambling to come up with cash to satisfy the bankruptcy court by a 4 p.m. December 28 deadline.

“Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments,” CNBC reports. “ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.”

However, as of Thursday afternoon, Lampert had not submitted his bid for failure to raise the cash, insiders say. If he manages to submit the bid by 4 p.m. Friday, Sears’ advisors will have a week to determine if he is a “qualified bidder.” If he’s approved, his hedge fund could “take part in an auction against liquidation bids on Jan. 14,” the outlet reports.

CNBC’s sources say it still is possible that Lampert could pull it off, as he’s managed similar feats in the past, and the the SEC’s requirement that he makes his bid public may be motivating him to wait until the last second. “Nonetheless, the quickly approaching cutoff puts Sears the closest to death it has ever been,” the outlet reports.

If he fails to submit the bid or qualify, Sears and Kmart, which ESL purchased in 2002, would begin the liquidation process as laid out by the bankruptcy court, a process which would take weeks.

Sears, which hasn’t been profitable since 2010, has already begun the painful process of dramatically downsizing, announcing the shuttering of nearly 200 stores over the last three months and reportedly looking into closing 50 to 80 stores in the near future.

Lampert took over as CEO for Sears five years ago and has used his hedge fund experience to help keep the struggling company afloat through ESL investments, which were protected by Sears’ assets until the company was forced to file for bankruptcy when it faced a $134 million payment it couldn’t make.

CNBC notes that court documents show that creditors have called Lambert’s financing plan to keep Sears alive a “foolhardy gamble with other people’s money.”

Sears is not the only iconic department store struggling to stay alive; JC Penney has likewise been scrambling to figure out how to compete in an increasingly online and mall-averse shopping climate. Over the last two years, J.C. Penney has been forced to close over a hundred stores nationwide.

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