Sears Holdings has received approval from the US Bankruptcy Court for the Southern District of New York for its proposed sale to hedge fund ESL Investments.
Judge Robert Drain made this decision following a three-day hearing with Sears Holdings’ unsecured creditors about their concerns regarding the deal, reported CNBC.
The sale was originally announced following an auction when ESL Investments became the winning bidder, offering approximately $5.2bn. The hedge fund is owned by Sears Holdings’ chairman Eddie Lampert.
In January this year, ESL Investments announced that it would buy all of Sears Holdings’ assets on a going-concern basis, preserving 45,000 jobs. This would include the Go Forward Stores asset.
During the three-day hearing, Sears Holdings’ creditors mentioned various potential flaws in ESL’s business plan along with its previous experience.
However, Judge Drain noted that the deal offered by ESL made ‘good business sense’ and determined that the sale was fair taking into consideration the time constraints resulting from its liquidity issues.
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In October last year, Sears Holdings filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in an effort to establish a sustainable capital structure.
During the same month, the US Bankruptcy Court for the Southern District of New York approved the retailer’s first day motions for its voluntary Chapter 11 restructuring.