Some Sears vendors back ESL's proposal and offer trade credit

 
 
Updated 1/9/2019 3:14 PM
hello
  • Some Sears Holding partners have come out in support of a proposal by Eddie Lampert's hedge fund that would avoid liquidating the department-store chain and keep stores open, according to a court filing.

    Some Sears Holding partners have come out in support of a proposal by Eddie Lampert's hedge fund that would avoid liquidating the department-store chain and keep stores open, according to a court filing. Associated Press

Some Sears Holding partners have come out in support of a proposal by Eddie Lampert's hedge fund that would avoid liquidating the department-store chain and keep stores open, according to a court filing.

Vendors that are owed money for goods shipped to Sears within 20 days of the retailer's bankruptcy, including furniture company Mien Company and apparel distributor Strong Progress Garment Factory Co., support the bid because they don't think the retailer's wind-down fund has enough money to pay their claims, according to a court filing.

The merchants "believe the bid of ESL Investments provides them with the best chance to be paid in the fastest manner," according to filing in federal bankruptcy court that was dated Jan. 7. "The Mien vendors do not want to see the debtors' remaining stores liquidated."

Numerous vendors said they are willing to help out ESL's bid by providing trade credit, according to the filing.

"I'm hopeful for a last-minute reprieve. I don't want to lose another customer," said Joe Shamie, president of Delta Enterprise Corp., a Sears vendor that manufactures children's furniture. Lampert "has pulled things out of a hat before. Let's hope he does it one more time."

Since the bankruptcy filing, Delta has kept shipping goods to Sears on short terms and isn't owed any money at this point, Shamie said in a phone interview.

Vendor support for ESL's bid is "sensible," Noel Hebert, a credit analyst who covers Sears for Bloomberg Intelligence, said in an email. "You'd rather not have your payables trapped in the estate. And if you still have a multi-billion dollar retailer demanding your wares, that is also preferable (so long as you are getting paid)."

ESL is planning to submit a new bid to keep Sears in business, according to a person with knowledge of the matter. The court deadline for a revised offer is later today.

Support for ESL may not be unanimous, however. Vendors such as Whirlpool Corp. demanded the return of previously shipped good after Sears filed for bankruptcy last year.

Article Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.