Jan. 8 (UPI) -- Sears reached a last-minute deal to stay open Tuesday after a revised bid from Chairman Eddie Lampert's hedgefund, ESL Investments.
Hope the company, which filed for bankruptcy in October, could be saved from liquidation, affecting 68,000 jobs nationwide, dwindled as it announced it would ask a judge to allow it to liquidate Tuesday.
However, after two long delays for the hearing in bankruptcy court, Sears attorneys announced the company had accepted a revised bid from ESL, which keeps 425 stores open at least for now.
Lampert's $4.4 billion bid is due to be completed in a Monday auction, and it is still possible that someone else could bid more for the assets than Lampert has.
Judge Robert Drain called the deal, which is still pending his approval, "a good development."
The agreement gives Sears a chance to survive which seemed to be vanishing ahead of the hearing.
Sears also owns Kmart. Lampert merged the two store chains in 2005.
Lampert made the $4.4 billion bid late last month to give the company a possible reprieve from liquidation through his hedge fund. But Sears advisers deemed the bid insufficient, saying the plan did not meet creditor approval. In particular, advisers said one of the biggest obstacles to reaching an agreement to save the company was that it was "administratively insolvent" as far as covering fees and vendor payments.
ESL Investments planned to protest the decision, a source told CNBC, pointing out extensive advisory fees that Sears accumulated during bankruptcy as part of its administrative expenses.
Lampert plans to save 50,000 of the 68,000 jobs through his bid. He will have until Wednesday afternoon to make a $120 million cash payment under changes in the bid reached in negotiations.
It was not immediately known how much additional cash Lampert will pay for assets, but he expects Sears to borrow $1.3 billion from three leading banks. He also offered to forgive more than $1 billion in debt owed by Sears from earlier loans he made to the company.
Though some Sears pieces such as its home services business could be spared in liquidation, it could mark the end of an era for a company started in 1893 and was the once the nation's largest retailer.
Known as the nation's first "everything store," Sears struggled to compete with online retailer Amazon and other retail giants like Walmart and Target and lost profitability over the past five years.