Sears reportedly preparing to file for Chapter 11 protection

Sears spent the weekend working with its lenders on a deal that will keep hundreds of stores open through Christmas, and the department store chain is expected to file for Chapter 11 protection by Monday morning, several people with knowledge of the matter told The Wall Street Journal Sunday.

Founded as Sears, Roebuck, and Co. in 1892, Sears has experienced several years of losses. It faces a Monday deadline to repay $134 million in debt. Sears employs about 70,000 people and operates 700 Sears and Kmart stores, and as part of the deal, it will likely immediately close at least 150 stores while evaluating 250 more. It is unclear if Sears will come out of the Chapter 11 bankruptcy as a much smaller chain, or if this will lead to a liquidation.

One person told the Journal that Sears CEO Edward Lampert believes it would be possible to reorganize the company's 300 most profitable stores, although those could be sold eventually, too.

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