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When Sears, Roebuck & Co., based in Illinois and established in 1893, filed for bankruptcy in New York Monday, it set in motion a chain of lawyers, litigation and paperwork.

Sears’ debt had been escalating for years, but the nail in its coffin was an impossible $134 million payment due on Oct. 15.

As day one of the retail giant’s bankruptcy proceedings comes to a close, we take a look at the key players behind the case.


Read Sears’ bankruptcy petition


Stephen Sitley is general counsel to Sears, which has retained Jacqueline Marcus, a partner at Weil, Gotshal & Manges in New York, to guide the company through its bankruptcy litigation.

Marcus’ background includes a lead role representing Lehman Brothers Holdings Inc., and a history of representing a host of big brand names, including retail store Aéropostale Inc. in bankruptcy proceedings. Her restructuring efforts with Aéropostale won her the “Turnaround of the Year: Mega Company” prize in September 2017, awarded by the Turnaround Management Association.

Another player: Adam M. Adler of Morgan, Lewis & Bockius in Washington, D.C., counsel to claims and noticing agent Prime Clerk LLC, which serves as a coordinator between Sears and the bankruptcy professionals involved in the case, gathering and analyzing information about assets, liabilities and other financial affairs.

New York firm Wachtell, Lipton, Rosen & Katz is expected to serve as adviser to Eddie Lampert, the former owner of Sears. Lampert stepped down immediately after the bankruptcy was announced.

Former Skadden, Arps, Slate, Meagher & Flom lawyer and restructuring expert Alan J. Carr joined Sears just one week ago and will serve as an adviser on the company’s board of directors during the bankruptcy.

Sears hinted at its action plan in a press release, stating that it “expects to move through the restructuring process as expeditiously as possible.” According to the statement, Sears has already begun to negotiate with its major stakeholders.

ESL Investments Inc., Lampert’s hedge fund, is currently holding talks to discuss options, one of which is to provide a $300 million junior bankruptcy loan, which would serve as a cash injection to keep bankruptcy proceedings afloat. The loan would be paid back after all obligations to senior lenders or creditors have been met.

Another option for ESL would be to make a stalking-horse offer, where it would back Sears’ assets ahead of an auction, avoiding the hazard of low bids.

James D. Silver, a partner with Kelley Kronenberg in Fort Lauderdale. Courtesy photo.

“Everyone’s going to be in a mad scramble to protect their own interests as much as they can, but at the same time give up what they can give up,” said Fort Lauderdale attorney James D. Silver of Kelley Kronenberg who’s worked in the bankruptcy realm for more than 30 years.

For Silver, who is not involved in the Sears case, the burning question is whether Lampert and his companies would be the only one offering a loan or if outside banks would join the fray, “which tends to at least be better from an appearance point of view.”

According to Silver, people tend to be “very suspect” when it comes to insiders such as Lampert taking the helm in bankruptcy proceedings, over fears he might be “trying to improve his position at their expense.”

The “tension,” Silver said, is that “without Lampert coming in and infusing new money, this may become an impossible situation and get worse.”

“Anything’s possible in a Chapter 11 bankruptcy, and a lot of it depends on what kind of plan they’re able to formulate and what kind of creditor support they’re able to marshal for that plan,” Silver said. ”There’s going to be a lot of give-and-take.”