Sears pursues Chapter 11 bankruptcy protection

One of the most iconic brands in the United States, with stores in Massachusetts, Sears recently decided that it needed to make a major move to address its financial situation. It therefore decided to file for Chapter 11 bankruptcy protection. The store plans to keep specific stores open while it negotiates with its creditor and reorganizes its operations.

During the reorganization process, Sears’ goal is to transition to a store platform that is smaller. This means it will close more than 180 stores this year. In addition, the current chief executive officer, Eddie Lampert, plans to step down from his post.

So far, Sears has been able to line up a few hundred million dollars from creditors. It is currently trying to negotiate for a few more hundreds of millions of dollars. Sears’ struggles are the result of billions of dollars in debt that the company has accumulated over time, plus its failure to evolve with customers’ changing tastes, along with the negative effects of e-commerce. The company ideally should emerge from the bankruptcy process as a less indebted, smaller retailer that will experience success in the coming years.

Sometimes, companies have a hard time overcoming their debts, and as a result, their liabilities end up outweighing their debts. Fortunately, in this situation, all hope is not lost. These struggling companies can seek Chapter 11 bankruptcy protection to get back in shape financially and start fresh. An attorney can help business owners to navigate the complex process of filing for bankruptcy both quickly and efficiently in Massachusetts.