U.S. Sears files for Chapter 11 amid plunging sales, massive debt

U.S. Sears files for Chapter 11 amid plunging sales, massive debt

U.S. Sears files for Chapter 11 amid plunging sales, massive debt

Sears is planning to seek bankruptcy protection in NY as soon as Sunday night, though a court filing could slip into Monday, the sources added, asking not to be identified because the negotiations are confidential.

In the early hours of Monday, Sears announced that it had filed for Chapter 11 bankruptcy.

The company has a $134 million debt payment due today. In just the last few years RadioShack, Toys "R" Us and Sports Authority have all followed the path to the retailer graveyard. Of all the remaining big-box department stores at that time, both Sears and Montgomery Ward should have been able to exploit online sales with a solid catalog-buying customer base.

"As we look toward the holiday season, Sears and Kmart stores remain open for business and our dedicated associates look forward to serving our members and customers", Lampert said in a statement. The company operates 700 or Sears and Kmart stores. The company created an Office of the Chief Executive - responsible for day-to-day operations - that will be filled by three officers. Sears opened its first store in 1925 in Chicago, and the Sears Tower in that city, now known as the Willis Tower, was the world's tallest building when it opened in 1973.

Judge Robert Drain will oversee the bankruptcy, with Sears represented by the law firm Weil Gotshal & Manges, according to court documents. Sears sold many of its most valuable assets, including its massive real estate footprint, to raise the cash it needed to survive. The future of the stores could hinge on Sears' negotiations with landlords over their leases.

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According to the release, the now-former CEO Edward Lampert will remain Chairman of the Board. The stock has lost about two-thirds of its already depressed value since Lampert announced the attempt to restructure the company's debt on September 24. But losses continued and the company struggled to get more people through the doors or to shop online.

Lampert's hedge fund, ESL Investments, said it had consistently believed that restructuring the company's finances could have been best achieved outside a court-run bankruptcy process. He's also one of the company's largest investors so he'll be a debtor and creditor during the bankruptcy proceedings. Maybe this will let them turn things around, but it unfortunately looks more like a last stand before annihilation. Now, all that remains is a rundown Sears outlet warehouse store scattered along the railroad tracks in an industrial neighborhood alongside the Allegheny River in Lawrenceville. It has also already sold off many of its brands, including Craftsman tools, and hasn't turned a profit since 2010.

Formed in 1886 by railroad station agent Richard Sears, the company started as a watch business in North Redwood, Minnesota.

For generations, Sears served the middle market of working-class homeowners hoping to buy high-quality products, but who could not afford to make the purchases outright without Sears monthly installment programs.

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