A bankruptcy court judge has approved the sale of Sears to chairman Eddie Lampert’s ESL Investments hedge fund, the sole bidder for the chain, over the objections of the company’s creditors.
The $5.2 billion purchase, which is still pending final agreements, will bring Sears out of bankruptcy, save some 45,000 jobs, and hand Lampert substantially all of its assets, including its remaining 425 stores.
According to the New York Times, a committee of creditors comprised of landlords and top vendors had pushed for liquidation, believing it the best way to recoup most of the $3 billion they’re owed.
They also questioned how Lampert, who led the company into bankruptcy, would now make a successful go of it.
But Judge Robert Drain determined that a fresh start under Lampert made sound business sense, the Times reported — as long he avoided becoming the “cartoon character” he’s been depicted as by critics, a cross between robber baron Jay Gould and bumbling television character Barney Fife.
Instead, Drain said, Lampert could “take action that would in fact be of great meaning” to Sears’ employees and other stakeholders. Whether the billionaire investor can turn around a smaller, nimbler, debt-forgiven Sears remains to be seen, although the track record for retail restructurings, like those of RadioShack and Toys“R”Us, is rocky.