Sears falls another 15% on report that it stopped paying vendors

CNN Finance 5 days ago

Sears stock plunged further on Thursday, falling after reports that companies that sell stuff at Sears say the retailer isn't paying them for their products.

Three companies told Reuters that Sears had missed payments to them over the past few weeks. Sears stock fell 14% in premarket trading Thursday. Sears did not respond to multiple requests for comment.

A bankruptcy could come very soon. Sears Holdings, the parent company of Sears and Kmart, faces a Monday deadline to pay $134 million in debt.

CEO and primary shareholder Eddie Lampert told the company's board that it was crucial it restructure more than $5 billion it owes "without delay," according to a recent regulatory filing.

But negotiations don't appear to be going well. The company's lenders are encouraging Sears to liquidate its assets in bankruptcy, according to the Wall Street Journal. Sears' management has said it hopes to stay in business.

If Sears (SHLD) does file for bankruptcy, it could try to stay in business, using the court process to shed debt and unaffordable leases. It could attempt to emerge as a profitable company.

But the retail landscape is littered with out-of-business brands that tried to reorganize in the bankruptcy process and liquidated their businesses instead. In just the last few years RadioShack, Toys "R" Us and Sports Authority have all followed the path to the retailer graveyard.

Tags: business
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