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Layoffs Loom Large as Banks Weigh Funding Deal to Save Sears

  • Lenders told they’d be blamed for job losses in a liquidation
  • Ex-CEO’s hedge fund needs Wall Street money to buy retailer
Shoppers walk outside of a Sears Holdings Corp. store in Montebello, California.

Shoppers walk outside of a Sears Holdings Corp. store in Montebello, California.

Photographer: Patrick T. Fallon/Bloomberg
Updated on

Bankers meeting to discuss financing for Sears Holdings Corp.’s impending bankruptcy erupted in disbelief when a headline crossed their smartphone screens. Its subject: them.

A breaking news report said the bankers, gathered Oct. 11 at the Manhattan offices of law firm Weil Gotshal & Manges, were pushing to liquidate the American retail icon instead of saving it with a new loan. The implications were clear, according to people familiar with the meeting: Keep Sears alive, or you’ll be publicly blamed for the 50,000 job losses that would come with its demise.