Sears explores bankruptcy filing even as CEO scrambles to avoid it

Sears explores bankruptcy filing even as CEO scrambles to avoid it

Lampert bought Sears in 2004 and merged it with Kmart, in which he had a controlling stake, the next year.

Sears stock dropped below the $1 threshold at the end of September. Victor Sandy, who helps suppliers hedge the risk of nonpayment for goods at Michigan-based Global Commercial Credit LLC, said vendors will be looking to see if Sears can secure enough financing to see it through bankruptcy. Reports circulated that the company is talking to advisers and banks in preparation for a bankruptcy filing.

Sears stores at Golden Triangle Mall in Denton and Ridgmar Mall in Fort Worth closed this year.

Sears Holdings shares lost almost a third of their value in early trading on Wednesday after a report said that the beleaguered retailer had hired advisers to prepare for a bankruptcy filing ahead of a debt payment deadline.

Investors are giving up hope on a deal. Sears wants to reduce its debt load by 80%, hoping creditors will bite at the chance to make a deal while the company is still a going concern. For example, he recently offered to buy its Kenmore appliance brand for $400 million.

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Sears' stock is down 83% this year, to below $1 a share. CNN reported that while that sell-off represented only 8 percent of the investor's holdings, he could be cutting his losses since "shareholders are typically wiped out in bankruptcy".

On Tuesday, Sears brought in corporate restructuring pro Alan Carr as a director.

Sears did not immediately return Fortune's request for comment on the WSJ report.

Sears Holdings is getting things in order for a bankruptcy filing that could come sometime this week.

But the retail landscape is littered with out-of-business brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead. Toys "R" Us' creditors lost faith in the retailer after revenue during last year's holiday season failed to meet their expectations. Sears' acting spokesman, Howard Riefs, said Brathwaite had informed the retailer of his exit last month. A long series of store closings has left it with fewer than 900 today. The company recently announced another 46 store closings that will take place just before the start of the holiday shopping period.

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