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Sears Holdings Corp.’s push to pay up to $25 million in bonuses to executives and some high-ranking non-insiders has drawn fire from a bankruptcy watchdog, WSJ Pro Bankruptcy reported. About a month after its bankruptcy filing, Sears filed court papers seeking permission to pay 18 top executives a share of an $8.5 million bonus pool. In addition, the retailer is looking to pay 322 non-insider workers bonuses from a $16.9 million pool. The proposed bonuses come as the future of Sears’s stores is being contemplated. “Against the backdrop of running going out of business sales, the shuttering [of] hundreds of stores, and the presumed termination of thousands of rank-and-file and hourly employees—[Sears is] seeking authority to pay significant bonuses to their senior executive officers and to senior officers and managers of their various divisions,” said U.S. Trustee William Harrington in court papers filed on Friday. The proposed bonuses would be paid to “the most highly compensated” of Sears’s employees, many of whom had received pay raises right before the bankruptcy filing, according to the court papers. Harrington points out this pool of employees makes up less than 0.5 percent of Sears’s total workforce of more than 60,000.

The $4.6 billion bid by Sears Holdings Corp. Chairman Edward Lampert to salvage what's left of the bankrupt retailer was pitched by the hedge fund manager as a way to preserve tens of thousands of jobs. The bid, if successful, would come with an important condition: a full release from liability over controversial deals his fund made before the 125-year-old retailer filed for chapter 11 bankruptcy, the Chicago Tribune reported. Those transactions — a series of spinoffs, rights offerings and refinancings starting in 2012 — are being probed by both Sears and a committee of unsecured creditors who stand to lose everything in the bankruptcy. Lampert entities now hold $2.6 billion of loans, making him the company's biggest creditor. Those claims are key to his bid because he would roll a significant portion of them into equity in a reorganized company. Taking the hedge fund manager up on his offer would defang the probes into Lampert's deals, an investigation that so far has caused Sears and others to hand over 400,000 pages of documents.

Leon Cooperman’s Omega Advisors Inc. is trying to roll back a bankruptcy auction that raised $82.5 million for Sears Holdings Corp. , saying the sale process was secretly skewed to squeeze credit-insurance buyers, WSJ Pro Bankruptcy reported. Omega alleged in court papers filed on Thursday that Sears struck a backroom deal to swing the auction in favor of Cyrus Capital Partners LP, one of the bankrupt retailer’s biggest creditors. Cyrus won the auction last month, buying up hundreds of millions of dollars in loan claims between different Sears affiliates. Cyrus bought the loan claims at auction, preventing them from falling into the hands of the insurance holders that need them and potentially salvaging its own bad bet on Sears. Omega wants the sale to Cyrus voided. Bankruptcy Judge Robert Drain has scheduled a Dec. 20 hearing on the matter.

Sears Holdings Corp. Chairman Eddie Lampert’s ESL Investments Inc. has made an offer valued at $4.6 billion to buy the bankrupt U.S. retailer, one of the only options that would prevent the department store chain from shutting its doors for good, Reuters reported. Lampert’s offer calls for about 500 Sears stores to remain open and would keep 50,000 of the retailer’s workers employed, according to a letter from his hedge fund filed yesterday with the Securities and Exchange Commission. The 125-year-old company faces a series of deadlines this month to find a buyer that would keep it in business as some of its creditors call for it to shut down, claiming they would be repaid more through going-out-of-business sales. Preliminary indications of interest for Sears assets were due on Wednesday, according to court papers.

Efforts by Shopko Stores to find a buyer have stalled, and the Midwestern retailer is making preparations for a bankruptcy filing, Bloomberg reported. The general merchandise chain, owned by Sun Capital Partners Inc., could still reach agreement on an out-of-court restructuring, but that scenario looks increasingly unlikely. The situation remains fluid, the sources said, with no guarantee that a court filing will happen at all, or that it will include a pre-negotiated plan to save the company. It would be the second trip to bankruptcy court in as many years for a Sun-owned retailer. Gordmans Stores Inc., an Omaha, Neb.-based department-store chain, went bankrupt in March 2017 with a plan to liquidate, a casualty of slowing mall traffic and online rivals such as Amazon.com Inc. Shopko runs 363 stores in 24 states under various formats, according to its website. Pharmacist James Ruben opened the first store in 1962, about the same time that Walmart Inc. and Target Corp. went into business, and Shopko went public in 1991.

Revised internal forecasts show that Sears Holdings Corp. will bleed hundreds of millions of dollars more than it expected over the coming weeks, casting new doubt on whether the bankrupt retailer can avoid liquidation, Bloomberg reported. When the company declared bankruptcy Oct. 15, it filed a budget with revenue forecasts of $241 million for the week of Christmas and $1.93 billion for the two months ending Jan. 12. But an updated budget filed Friday shows only $215 million the week of Christmas and $1.69 billion for the entire two months, almost $246 million less than originally projected. Sears also now expects negative operating cash flow in the weeks leading up to Christmas and net cash flow before financing of minus $434 million for the 13 weeks through Feb. 16. The revised figures were included in documents filed late last week with the federal bankruptcy court handling the case. A Sears representative declined to comment.

John Connaughton, co-managing partner at Bain Capital, said that the decision to establish a $20 million fund to help workers who lost jobs when Toys “R” Us Inc. shuttered was the result of a unique set of circumstances, Bloomberg reported. Connaughton said that Bain, which owned the retailer along with KKR & Co., wanted to recapitalize Toys “R” Us within chapter 11 bankruptcy proceedings but that creditors opted to liquidate the company. So Bain and KKR decided to each contribute $10 million to a fund to pay severance to former employees because it was “the right thing to do.” “It’s just unique and exceptional in this context for the creditors as well as the company to be in this position where it was taken out of their hands,” Connaughton told Bloomberg Television Wednesday. Toys “R” Us shuttered its last stores at the end of June, and its liquidation left more than 30,000 workers without expected severance payouts.

Kids’ clothing retailer Gymboree Group Inc. said today that it has initiated a strategic review of its brands Gymboree, Janie and Jack, and Crazy 8, which could result in the sale of some brands and the closure of some stores, Reuters reported. Gymboree said it intends to shut its Crazy 8 store locations and cut the number of Gymboree store locations in 2019. The company also said it has appointed Shaz Kahng, who led the turnarounds of retailer Lucy Activewear and various Nike business segments, as group CEO on Nov 14. San Francisco-based Gymboree filed for bankruptcy in June 2017. Through that process, it cut its debt by $1 billion and closed a quarter of its shops. It emerged from bankruptcy in September 2017 with debt that included an $85 million term loan and a $200 million revolving credit line.

Bankrupt Applebee’s restaurant operator RMH Franchise Holdings Inc. said it has reached a tentative deal to pay at least $47 million in cash to secured lenders led by Bank of America, WSJ Pro Bankruptcy reported. The nation’s second-largest Applebee’s franchisee shared news of the settlement during a hearing Monday before Judge Brendan Linehan Shannon in U.S. Bankruptcy Court in Wilmington, Del. RMH filed for bankruptcy in May and has spent much of the time battling objections from parties that include Dine Brands Global Inc., which owns the Applebee’s brand, as well as Bank of America NA and other senior secured lenders owed more than $60 million. RMH is expected to be recapitalized with about $10 million from its current owner, private-equity firm Acon Investments.