Sears should close all stores, creditors say


Sears
Some of Sears’ creditors
want the company to shut down its remaining
stores.

AP Photo/Charlie
Riedel


  • Sears
    unsecured creditors are urging the company to shut down all of
    its remaining stores. 
  • In a bankruptcy filing, the creditors slammed Sears’
    plan to stay in business as “nothing more than wishful
    thinking” and “an unjustified and foolhardy gamble with
    other people’s money.”
  • Sears has proposed cutting its store count to roughly
    400 profitable stores, then selling the associated real estate
    to raise cash while the company works to return to
    profitability.

Sears’
creditors are demanding that the company shut down all its
remaining stores.

The retailer’s plan to survive bankruptcy is “nothing more than
wishful thinking” and “an unjustified and foolhardy
gamble with other people’s money,” a group of unsecured creditors
has declared in a new filing. 

Sears has proposed cutting its store count to roughly 400
profitable stores, then selling the associated real estate to
raise cash while the company works to return to profitability.
The company had 687 stores when it filed for Chapter 11
bankruptcy in mid-October. 


Read more:

Sears is closing another 40 stores — here’s the complete list of
locations

Creditors seem to believe that Sears has little chance of
achieving profitability even with only its most successful
stores, saying this is a “feat [Sears] could not accomplish in
the six years leading up to the commencement of their” bankruptcy
filing.

Unsecured creditors have the most to lose in bankruptcy
cases. The debt they have extended to debtors — in this case,
Sears — is not secured by any real estate or other assets. So
they are the least protected in the event of a
liquidation. 

The costs associated with continuing to keep Sears’ stores
open would drain some of the remaining funds owed to these
creditors, they said.

Assuming Sears sells the remaining stores within three
months, the company could burn through about $375 million, the
filing reads. 

“By contrast, pursuing [going-out-of-business] sales for
all of [Sears’] stores during the same time period may maximize
the value of [Sears’] estates,” it continues. 

A representative for Sears declined to comment. 

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