Sears Holdings has rejected Chairman Eddie Lampert‘s bid to save the 126-year-old company, setting the storied retailer with more than 50,000 employees on a path to liquidation, people familiar with the situation told CNBC on Tuesday. Sears, which also owns Kmart, planned to announce its liquidation plans Tuesday morning, the people said.
Lampert had put forward a $4.4 billion bid to save Sears by buying it out of bankruptcy through his hedge fund ESL Investments. His offer, though, was deemed insufficient by Sears’ advisors, the people said. One of the biggest unresolved issues was covering the fees and vendor payment it owes, making it “administratively insolvent.”
Still, ESL plans to protest Sears’ decision, a person familiar with the situation told CNBC. ESL, which worked over the weekend to improve its offer, will point to the extensive advisory fees that Sears has racked up during bankruptcy. Such fees are part of Sears’ administrative expenses.
The people requested anonymity because the information is confidential.
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 in 1893 as Sears, Roebuck & Co., and was once the 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….