Lampert's hedge fund, ESL Investments, will now be required to pay a $120 million deposit by 4 p.m. Wednesday.
Sears Holdings Corp agreed on Tuesday to consider a revised takeover bid from Chairman Edward Lampert, temporarily staving off a liquidation that would have spelled the end of the 126-year-old US department store operator. After several days of "virtually round-the-clock negotiations", Sears agreed to compare a revised version of Lampert's bid at the bankruptcy auction, Schrock said. According to lawyers close to the matter, one of the main sticking points was that the $4.4 billion bid, which included $1.3 billion in financing from three financial institutions, didn't include cash.
But at a NY bankruptcy court, Sears' lawyers told a judge that the company was prepared to consider a revised offer from Sears' chairman Eddie Lampert's ESL hedge fund.
U.S. Bankruptcy Court Judge Robert Drain on Tuesday said other parties can submit additional or improved bids before the Monday auction and that Sears will be obligated to consider all its options. "A bankruptcy auction for Sears' assets is not due until January 14".
Lampert's is the only bid created to keep Sears open.
Under Lampert, Sears has bought time over the years by spinning off stores and putting on the block the brands that had grown synonymous with the company, such as Craftsman.
Sears filed for bankruptcy in October.
Lampert and his hedge fund argue the loans were proper and made to keep Sears alive. But itis still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering, which wouldset the company on the path of shutdown once again rather than remaining in business.
Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does.
Lampert will be able to use debt he controls as part of his bid, a process known as "credit bidding", Schrock said.
Tuesday's court hearing in the Southern District of NY comes a day after the retailer took to social media to dispel the notion it was not longer in the running, saying in a tweet: "We may be slowing down, but we are not out of the race just yet".