💥Sears: An Anticlimactic Sale💥

Sears Sales Process “Ends” With a Thud (Long Strong PR).

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Over the last several weeks we received various emails inquiring as to why we hadn’t — given our previous fulsome coverage of Sears Holding Corporation’s ($SHLDQ) bankruptcy — done a deep dive into the Official Committee of Unsecured Creditors’ lengthy objection to the company’s proposed sale to Eddie Lampert. In most cases, we curtly answered, “it’s not worth our time.” Suffice it to say, we were right. As a legal and practical matter, it seemed obvious since the auction which direction the sale hearing was going to go. Mr. Lampert “won” the auction over the bid of Abacus Group, a liquidator, and literally within hours the UCC’s objection to the sale hit the docket. Among other things, the UCC alleged that the creditors were better off with liquidation, that Mr. Lampert’s business plan lacked credibility, and that, in some respects, the whole auction process was a joke.

It was all for nothing. After three days of hearings, Judge Drain approved the debtors’ proposed sale to Mr. Lampert, overruling the vehement objections of the UCC; he applied, as expected, the "business judgment" rule and approved a sale pursuant to an asset purchase agreement that, in exchange for a total of approximately $5.2b of (a hodge-podge of) consideration, means that Sears will continue as a going concern business under Mr. Lampert's continued management. Approximately 425 stores will remain. For at least the short-term. And 45k jobs have been preserved. At least in the short-term. The court officially entered the 83-page sale order onto the docket midday on Friday, February 8.

Some takeaways from the hearing: