CNBC is reporting that Sears Holdings, the parent company of Sears and Kmart, has contacted banks in recent days to arrange the financing necessary to file for bankruptcy. The Wall Street Journal says that move could come by week's end.
The retailer, which has been in business 125 years, is facing a debt payment next Monday that it has said previously it may not be able to cover. It totals $134 million worth of debt that must be paid by Oct. 15.
According to a recent regulatory filing, CEO Eddie Lampert told the company's board it needs to restructure more than $5 billion it owes "without delay."
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One of Sears' major shareholders just dumped a chunk of his stock for pennies on his original investment and the company also added a new director Tuesday who is familiar with bankruptcies and restructuring. Reports have also circulated that the company is speaking with advisers and banks in preparation for a bankruptcy filing.
Sears holdings stock plunged 30 percent in premarket trading Wednesday.
If Sears does file for bankruptcy, it could try to stay in business, using the court process to shed debt and unaffordable leases.
2010 was Sears' last profitable year and it has closed hundreds of stores in recent years.