Sears Holdings Corp. is preparing to file for Chapter 11 bankruptcy protection in the coming days following years of declining sales, sources said on Wednesday, casting doubt over the survival of what was once the world's largest retailer.
The bankruptcy filing would end a standoff between Chief Executive Officer Eddie Lampert, the retailer's biggest shareholder and lender, and a special board committee the company has formed to consider a rescue plan proposed by Lampert that would involve asset sales and a debt restructuring.
The committee has been resisting the plan amid concerns that creditors and shareholders would sue over it being too favorable for Lampert. His history of financial engineering at Sears for more than a decade through deals tied to his hedge fund ESL Investments Inc. could now be subjected to new scrutiny by Sears' creditors in bankruptcy court, according to the sources.