Sears could liquidate in weeks, court filings show: report

Sears is relying on a bailout from Eddie
Lampert.
Reuters

• Sears is
  about to find itself in a dire cash situation, according to
  court filings reported by
  Bloomberg.
• The company is relying on a $300 million bailout from
  former CEO Eddie Lampert. Without this, it could be forced to
  liquidate in as soon as two weeks from now. 
• The department store has been closing stores and losing money
  for years. It has stayed afloat thanks to Lampert bailing it out
  with billions of dollars in loans through his hedge fund, ESL
  Investments.

Sears’
turnaround effort is looking even more difficult than
expected. 

According to court filings reported by
Bloomberg, the retailer is about to find itself in a dire
cash situation just days after it secured $300 million in funding
from lenders upon bankruptcy. 

The documents show that the retailer is expected to burn through
$220 million of this cash within the first month of bankruptcy,
which is making it completely dependent on an additional loan
from its controversial former CEO, Eddie Lampert, via his hedge
fund ESL Investments. 

A representative for Sears did not immediately respond to
Business Insider’s request for comment. 

Read more:

Inside Sears’ death spiral: How an iconic American brand has been
driven to the edge of bankruptcy

According to a budget approved by the court, Sears is
expecting to receive a $112 million loan from Lampert by November
3 and another $188 million over the next two months.

In the court filing, Sears said that the additional loan
“will not be required for the Debtors to operate during the first
two weeks of these cases, but will become necessary thereafter,”
Bloomberg reported. 

ESL Investments declined to comment on the matter to
Business Insider.

The company
filed for bankruptcy on Monday and announced it would be
closing an additional 142 Sears and Kmart stores before the end
of the year. Lampert stepped down as CEO but is staying on as
chairman. 

Sears has been losing money and closing stores for years, and
many employees blame Lampert for its struggles. 

However, the department store has managed to stay afloat thanks
to Lampert bailing it out with billions of dollars of loans
through ESL Investments.

Read more about Sears’ downfall: