×

Plan Moving Forward

Filing Details Plan To Save Hundreds Of Kmart, Sears Locations

Kmart pictured at its longtime West Ellicott location. P-J file photo by Jordan W. Patterson

WHITE PLAINS — It won’t take much for the Kmart location in West Ellicott to close along with the Sears location in the Chautauqua Mall.

Right now, the West Ellicott Kmart store is slated to remain open because it is one of 400 profitable locations in the Sears Holdings Corp. portfolio, according to documents filed Thursday in the U.S. Bankruptcy Court’s Southern District.

Sears wants to rebuild its business around the 400 stores, but the path to do so is limited and centers on a sale of those profitable stores to save Sears and Kmart and the jobs of the stores’ employees. Sears Holdings Corp. also plans to market and sell some of its non-core assets, like intellectual property and specialty businesses, to pay for ongoing Chapter 11 bankruptcy cases.

“Time is of the essence,” the filing states. “As previously discussed, these Chapter 11 cases must progress with all deliberate speed to stem the substantial operating losses that will continue to decrease the value of the debtors’ estates. Accordingly, the prompt consummation of sale transactions that will maximize value for the debtors’ estates and preserve as many jobs as possible is a cornerstone of the debtors Chapter 11 strategy.”

Sears Holding Corp. is proposing approval of global bidding and sale procedures to market, auction and sell its assets, allowing the company to solicit proposals, negotiate transactions, provide stalking horse protections, hold auctions and complete transactions while allowing interested parties to review the transactions. The proposed rules set out specific milestones that must be reached, including a fully financed stalking horse bid — an attempt by a bankrupt debtor to test the market for the debtor’s assets in advance of an auction so the debtor can maximize the value of its assets or avoid low bids — of all its “go forward stores” by Dec. 15. The West Ellicott Kmart is one of those “go forward stores.”

By Jan. 14, 2019, the court shall have entered the bidding procedures order, with Sears Holding Corp. beginning an auction for the sale of its go forward stores by Feb. 2, 2019.

Then, Sears Holdings needs an order approving the sale of the go forward stores by Feb. 4, 2019, and close on that sale no later than Feb. 8.

The first $200 million of sale proceeds from the unencumbered assets will pay for a wind-down reserve for Sears Holdings Corp.’s estates. Failing to adhere to the proposed timeline, then, could jeopardize both the company’s creditors efforts to recoup their money but also the future of the “go forward” stores like the West Ellicott Kmart.

“It is important that the debtors have the ability to promptly take action to fund the wind down reserve account with maximum proceeds and minimize administrative costs,” the motion states. “Access to the DIP ABL Facility and cash collateral is critical to the debtors’ ability to continue their operations and manage their bankruptcy estates through the conclusion of the sale process. Failure to adhere to the DIP milestones could jeopardize the debtors’ access to cash under the DIP ABL Facility and, in turn, compromise the debtors’ chapter 11 strategy and ability to maximize recoveries for creditors.”

A hearing on the motion will be held at 10 a.m. Thursday, Nov. 15, in the Southern U.S. District Bankruptcy Court.

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

COMMENTS

[vivafbcomment]

Starting at $4.62/week.

Subscribe Today