What This Analyst Expects To Happen With A Sears Bankruptcy

Matt Kopsky

Eddie Lampert is reportedly fed up. Or possibly he no longer sees the point. Either way Lampert, the hedge fund manager who controls Sears, is reportedly not going to lend the company money to repay $134 million in debt, which is due next week, according to multiple news accounts that have cited people familiar with the matter. He has bailed the retailer out multiple times already and most recently, proposed a major restructuring of the company’s debt and retail operations.

Assuming these accounts are true, what will happen to the retail landscape under a Sears bankruptcy? Matt Kopsky, a REIT Analyst with Edward Jones, has a few thoughts. He believes there will be:

A Negative Reaction for Retail REITs

A Sears bankruptcy doesn’t come as a surprise given its struggles over the past several years and the upcoming debt maturing. But even though a bankruptcy has been partially priced into retail REIT shares, there still be a negative effect.

Sears Will Eventually File for Chapter 7 Liquidation

Kopsky expects a Chapter 11 restructuring announcement soon but he believes that Sears will eventually file for Chapter 7 liquidation like Toys R Us and The Sports Authority due to several reasons: