"Sears Holdings Corp will ask a bankruptcy judge on Tuesday if it can proceed with liquidation after it could not reach an agreement on Chairman Edward Lampert's $4.4 billion takeover bid, casting doubt on the survival of the 126-year-old USA department store", Reuters exclusively reported Tuesday, citing sources familiar with the matter. The deal could keep 425 of the stores open. According to Reuters' sources, the bid fell short.
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.
The revised bid is not official, and will be evaluated in an auction set for January 14 that will compete with other bids from liquidators looking to shut it down.
Sears has been struggling for several years with bare shelves and displays.
Once America's largest department store chain, Sears had 687 stores and 68,000 workers by the time the Illinois-based company filed for Chapter 11 bankruptcy protection in October.
Under the new terms, Lampert must come up with a $120 million cash payment by Wednesday afternoon, as a down payment.
The deal was reached after days of "virtually round-the-clock negotiations", Sears attorney Ray Schrock told the court. Those creditors, which include Sears landlords and bondholders, have also questioned Lampert's pre-bankruptcy transactions with the retailer.
Lampert's offer was reportedly the only one that sought to rescue the company rather than liquidate it.
That bid had included $1.3bn (£1bn) in financing from three institutions, ESL said in a statement.
A hearing is scheduled for Tuesday in bankruptcy court.
Unsecured creditors have pushed for Sears to liquidate, partially because they contend they will realize a better financial recovery if it does.