Sears Takeover Bid Fails, Asks Bankruptcy Judge To Liquidate

Sears to Liquidate After Takeover Bid Falls Through

Sears to Liquidate After Takeover Bid Falls Through

Sears, which also owns Kmart, planned to announce its liquidation plans Tuesday morning, the people said.

The end appears to be nigh for Sears. The company will pursue liquidation after it couldn't reach a deal with Chairman Edward Lampert on his $4.4 billion takeover bid for the 125-year-old chain.

A hearing is scheduled for Tuesday in bankruptcy court. Lampert, though, protested the decision, highlighting the extensive costs of Sears' bankruptcy advisors, a person familiar with the situation told CNBC.

A liquidation could still salvage pieces of the storied retailer, like its home services business. Still, it marks the end of an era for the company that started more than a century ago as Sears, Roebuck & Co., and was once nation's largest retailer. Its fall from grace saw it swing from being the "first everything store" to a business that couldn't compete when "everything" was found online after Amazon arrived. It is still possible that those wishing to shutdown the company will bid more for the assets than Lampert is offering.

Lampert and his hedge fund argue the loans were proper and made to keep Sears alive. As Sears' losses piled up, it didn't have a choice, it couldn't invest.

While current Sears shareholders have lost almost all their investment and creditors that include the US government are owed $11 billion, Lampert has pocketed nearly $1.4 billion to date from his investment in the retailer, calculated Institutional Investor in a recent story.

Since Sears filed for Chapter 11 bankruptcy protection October 15, Lampert has been fighting to keep a few hundred Sears and Kmart stores open. It employed 68,000 workers at the time of its filing.

Sears declined comment Tuesday in an email to CBS MoneyWatch. Transform Holdco, a new entity controlled by ESL, said in a letter to Sears' investment banker that it believes keeping the Hoffman Estates-based retailer in business is the best way to preserve jobs and recover money the retailer owes.

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