Sears craters after filing for bankruptcy (SHLD)

A Sears Essentials store in Palatine Illinois

With Sears heading toward bankruptcy, any potential for liquidation could mean an end to the lease agreements with Seritage.

For years, Sears has contended with the threat that it would become the latest big-name retailer to fall to online competition and crushing debt. The company added a new director who is familiar with bankruptcies and restructuring. He said previously the situation did not have the "sense of urgency" that exists now. Negotiations over the fate of the fallen company have been continuing this week, as it faces a critical $134 million of debt that is maturing on October 15. Lampert gave up his title of chief executive officer as part of the filing. Sears Holdings (SHLD) stock ended 17% lower Wednesday. Sears shares have traded under $1 for all of October ー a jarring price for a stock that hit an all-time high near $120 in April 2007, just before its fortunes began to turn.

Having so little cash available would make it very hard for Sears to pay back $134 million in debt due on Monday.

Sears revealed Tuesday night that investor Bruce Berkowitz of Fairholme Capital Management dumped 142,000 shares of Sears in the last few days, for only 59 cents to 65 cents a share.

As of Friday afternoon, the company and its creditors were still hammering out the details of a bankruptcy plan. Edward S. Lampert has stepped down as CEO but will remain chairman of the board.

Three companies that sell items at Sears told Reuters this week that Sears had missed payments to them over the past few weeks. According to the Wall Street Journal, Sears has hired M-III Partners, a boutique advisory firm specializing in seeing companies through bankruptcies and restructuring, The company is also talking to lenders about providing it with debtor-in-possession financing, CNBC reported.

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Sears said it has received a $300m financing package to fund its operations during the bankruptcy proceedings and was negotiating an additional $300m.

Sears did not immediately respond to a request for comment.

It joins a growing list of retailers that have filed for bankruptcy or liquidated in the last two years amid a fiercely competitive climate.

For much of the 20th century, Sears Holdings Corp. defined American retailing with catalogs and department stores that brought toys, tools and appliances to millions of homes.

Craig Johnson, president of retail consultancy Customer Growth Partnership, said: "This is a company that stood like a colossus over the American retail landscape". Sears has closed hundreds of stores already in an effort to stay afloat. Sears and Kmart stores grew barren and rundown.

The company had 89,000 employees as of February, according to a filing with the Securities and Exchange Commission - down from around 350,000 a decade ago. That's down from 317,000 United States employees in early 2006, soon after the merger. He has so far not disclosed whether he has turned a profit or loss since he invested in Sears following years of complex financial engineering at the company.

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