(Bloomberg) -- Some Sears Holding Corp. partners have come out in support of a proposal by Eddie Lampert's hedge fund that would avoid liquidating the department-store chain and keep stores open, according to a court filing.
Vendors that are owed money for goods shipped to Sears within 20 days of the retailer's bankruptcy, including furniture company Mien Company and apparel distributor Strong Progress Garment Factory Co., support the bid because they don't think the retailer's wind-down fund has enough money to pay their claims, according to a court filing.
Related: Lampert Is Said to Prepare Improved Offer to Keep Sears Open
The merchants “believe the bid of ESL Investments provides them with the best chance to be paid in the fastest manner,” according to filing in federal bankruptcy court that was dated Jan. 7. “The Mien vendors do not want to see the debtors' remaining stores liquidated.”
Numerous vendors said they are willing to help out ESL's bid by providing trade credit, according to the filing.
“I'm hopeful for a last-minute reprieve. I don't want to lose another customer,” said Joe Shamie, president of Delta Enterprise Corp., a Sears vendor that manufactures children's furniture. Lampert “has pulled things out of a hat before. Let's hope he does it one more time.”
Since the bankruptcy filing, Delta has kept shipping goods to Sears on short terms and isn't owed any money at this point, Shamie said in a phone interview.
‘Sensible'
Vendor support for ESL's bid is “sensible,” Noel Hebert, a credit analyst who covers Sears for Bloomberg Intelligence, said in an email. “You'd rather not have your payables trapped in the estate. And if you still have a multi-billion dollar retailer demanding your wares, that is also preferable (so long as you are getting paid).”
ESL is planning to submit a new bid to keep Sears in business, according to a person with knowledge of the matter. The court deadline for a revised offer is later today.
Support for ESL may not be unanimous, however. Vendors such as Whirlpool Corp. demanded the return of previously shipped good after Sears filed for bankruptcy last year.
To contact the reporters on this story: Josh Saul in New York at jsaul15@bloomberg.net;Matt Townsend in New York at mtownsend9@bloomberg.net
To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Jonathan Roeder, Rick Green
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