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All American Oil & Gas Inc., blaming the recent drop in energy prices, has negotiated a purchase offer with its biggest lender instead of using the bankruptcy process to reorganize under its existing owners, WSJ Pro Bankruptcy reported. The proposed deal, unveiled on Tuesday in court filings, marks the end of the company’s efforts to fight off takeover attempts from lender Grade 6 Oil LLC, which had made prior offers for All American’s drilling wells located on a 215-acre portion of California’s San Joaquin Valley oil field. The lender, owed $141.9 million, has agreed to forgive that debt, pay off the company’s existing debt and keep the company’s workers on staff, according to documents filed in the U.S. Bankruptcy Court in San Antonio.

Billionaire Edward Lampert will get one last chance to keep Sears Holdings Corp. from closing down, after the retailer agreed to let its longtime leader compete in a bankruptcy auction that will decide the once-iconic department store’s fate, WSJ Pro Bankruptcy reported. Sears, which filed for chapter 11 protection in October, plans to hold a court-supervised auction on Monday that will determine whether what is left of the 126-year-old chain is liquidated or left in Mr. Lampert’s control. The retailer’s independent board members and creditors want to wind down the business, but the hedge fund manager-turned-CEO wants to keep 425 stores open. After Mr. Lampert promised to revise his proposal, a Sears lawyer yesterday told the judge overseeing the bankruptcy case that the company would move forward with the planned auction. If Sears had rejected Lampert’s bid, there would have been no auction and Sears would have begun to liquidate.

Bankrupt All American Oil & Gas Inc. of San Antonio is working on a deal to sell its assets to its largest creditor, the San Antonio Express-News reported. The proposed transaction calls for creditor Kern Cal Oil 7 to bid the amount it’s owed by AAOG for the San Antonio company’s assets. Such an offer is known as a “credit bid.” In October, KCO acquired $142 million in loans made to AAOG. The bankruptcy had been shaping up to be a hotly contested affair until AAOG and KCO recently agreed to mediate their claims. AAOG President Patrick Morris had accused Santa Monica, Calif.-based KCO of attempting to strip AAOG and its two subsidiaries of their equity as a way to get the companies assets “on the cheap.” KCO responded by alleging that AAOG improperly directed millions of dollars to company insiders, shareholders, various professionals and creditors ahead of its Nov. 12 chapter 11 bankruptcy filing. “Peace has broken out,” AAOG bankruptcy lawyer Richard Wynne quipped to Chief U.S. Bankruptcy Judge Ronald King during yesterday court hearing. Read more.

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A long-standing liquidator is now first in line for one of the U.S. retail sector’s most daunting assignments: shutting down 126-year-old department store chain Sears Holdings Corp., Reuters reported. Sears has lined up Closter, N.J.-based Abacus Advisory Group LLC to sell the chain’s vast inventories of tools, appliances and store fixtures should negotiations with Chairman Edward Lampert over his $4.4 billion takeover bid end unsuccessfully. Lampert’s bid to rescue Sears through an affiliate of his hedge fund, ESL Investments Inc., has fallen short so far, the sources said. The billionaire and Sears are racing to resolve the bid’s sticking points before a Tuesday court date after negotiations dragged well beyond a Friday deadline, the sources said. The bid would preserve 425 Sears stores and up to 50,000 jobs across the United States, according to a letter delivered to Sears on Dec. 28. A liquidation would put roughly 68,000 people Sears now employs out of work.

After filing for bankruptcy last year, the owners of the Danforth Inn in Portland have sold the property to a boutique hotel chain for $1.7 million, the Bangor (Maine) Daily News reported. The nine-bedroom luxury inn located in Portland’s West End was sold on Friday to Lark Properties, which operates Lark Hotels, according to a statement from Raymond Brunyanszki and Oscar Veret, who have owned the inn since 2014. The Danforth Inn will be closed for the remainder of January and will reopen Feb. 1, according to a statement from Lark Hotels. During that time, existing Danforth Inn employees can apply to be hired by Lark Hotels. Guests who had reservations for the month of January will either be transferred to the Press Hotel in Portland or can push their stay to a date when the inn has reopened, according to Lark Hotels’ statement.