Item 8.01. Other Events.
As previously disclosed, on October 15, 2018, Sears Holdings Corporation (the “Company”) and certain of its subsidiaries (together with the
Company, the “Debtors”) filed voluntary petitions under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”). The Chapter 11 Cases are being jointly administered under the caption “In re Sears Holdings Corporation, et al., Case
No. 18-23538.”
Documents filed on the docket of and other
information related to the Chapter 11 Cases are available free of charge online at https://restructuring.primeclerk.com/sears. Documents and other information available on such website are not part of this Current Report on Form
8-K
and shall not be deemed incorporated by reference in this Form
8-K.
As
previously disclosed in a Current Report on Form
8-K
filed with the Securities and Exchange Commission (the “SEC”) on February 14, 2019, on February 11, 2019, the Company and certain of its
subsidiaries completed a sale of substantially all of the
go-forward
retail footprint and other assets and component businesses of the Company as a going concern pursuant to that certain Asset Purchase
Agreement, dated January 17, 2019, with Transform Holdco LLC, an affiliate of ESL Investments, Inc., a significant creditor and shareholder of the Company. The Company also disclosed at that time that it had reached a settlement with the
Pension Benefit Guaranty Corporation (the “PBGC”), the Company’s largest unsecured creditor, in respect of its claims, and had filed a term sheet with the Bankruptcy Court that reflected the material terms of the settlement agreement
(the “PBGC Settlement Terms”).
As previously disclosed in a Current Report on Form
8-K
filed with the
SEC on April 18, 2019, on April 17, 2019, the Debtors filed a proposed Joint Chapter 11 Plan of Liquidation (the “Plan of Liquidation”) and a Disclosure Statement describing the Plan of Liquidation and the solicitation of votes
to approve the same from certain of the Debtors’ creditors with respect to the Chapter 11 Cases.
On May 16, 2019, the Debtors filed an amended
Plan of Liquidation (the “Amended Plan of Liquidation”) and an Amended Disclosure Statement (the “Amended Disclosure Statement”) describing the Amended Plan of Liquidation and the solicitation of votes to approve the same from
certain of the Debtors’ creditors with respect to the Chapter 11 Cases. Among other things, the Amended Plan of Liquidation and Amended Disclosure Statement reflect amendments to the PBGC Settlement Terms (such amended terms, the “Amended
PBGC Settlement Terms”) Pursuant to the Amended PBGC Settlement Terms, the Company and the PBGC have agreed, among other things, that the Debtors may propose, and PBGC will support, the Amended Plan of Liquidation and Amended Disclosure
Statement providing for distributions to all of the Debtors’ creditors on a consolidated basis and to increase the PBGC’s priority claim to $97.5 million.
Information contained in the Amended Plan of Liquidation and the Amended Disclosure Statement is subject to change, whether as a result of amendments or
supplements to the Amended Plan of Liquidation, third-party actions, or otherwise, and should not be relied upon by any party. Copies of the Amended Plan of Liquidation and the Amended Disclosure Statement are attached hereto as Exhibits 99.1 and
99.2, respectively.
This Current Report on Form
8-K
is not a solicitation to accept or reject the proposed
Amended Plan of Liquidation. Any such solicitation will be made pursuant to and in accordance with the Amended Disclosure Statement and applicable law, including orders of the Bankruptcy Court.
Forward-Looking Statements
As previously reported in a
Form
12b-25
filed on April 18, 2019, the Company will not file an Annual Report on Form
10-K
for the fiscal year ended February 2, 2019 or any quarterly
reports on Form
10-Q
for subsequent periods ended prior to the confirmation of the Plan of Liquidation. Instead, the Company will file Current Reports on Form
8-K
containing (i) disclosure of all material events in the Chapter 11 Cases and any other information required by the instructions to Form
8-K
and (ii) as exhibits, the operating reports and any other
documents that include unaudited financial information that are filed by the Company with the Bankruptcy Court.
Various statements in this Current Report
on Form
8-K
or documents referred to herein, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. The Company’s actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain risks and other factors, which could include the following: risks and uncertainties relating to the Chapter 11 Cases, including but not limited to, the Company’s ability to obtain Bankruptcy
Court approval with respect to motions in the Chapter 11 Cases, the effects of the Chapter 11 Cases on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 Cases and the outcome of the Chapter 11 Cases
in general, the duration of the Chapter 11 Cases, risks associated with third-party motions in the Chapter 11 Cases, the Company’s ability to realize proceeds from remaining assets and the related terms and conditions; risks associated with
litigation and other claims that involve the Company; risks related to the trading of the Company’s common stock and warrants on the OTC Pink Market, particularly because the Amended Plan of Liquidation states that there will not be sufficient
funds or other assets in the Estate to allow holders of the Company’s