Item 7.01
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Regulation FD Disclosure.
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As previously reported, on October 15, 2018 (the Petition Date), Sears Holdings Corporation (the Company) and certain of its
subsidiaries (collectively, the Debtors) filed voluntary petitions (the Chapter 11 Cases) in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) seeking relief under
chapter 11 of title 11 of the United States Code.
On December 28, 2018, the Debtors filed with the Bankruptcy Court their monthly operating report
for the period beginning October 15, 2018 and ending November 3, 2018 (the October Monthly Operating Report), and their monthly operating report for the period beginning November 4, 2018 and ending December 1, 2018
(the November Monthly Operating Report). On January 25, 2019, the Debtors filed with the Bankruptcy Court their monthly operating report for the period beginning December 2, 2018 and ending January 5, 2019 (the
December Monthly Operating Report, and together with the October Monthly Operating Report and the November Monthly Operating Report, the Monthly Operating Reports). The October Monthly Operating Report, the November Monthly
Operating Report and the December Monthly Operating Report are attached hereto, respectively, as Exhibits 99.1, 99.2 and 99.3, and are incorporated herein by reference. This Current Report on Form
8-K
(including the exhibits hereto) will not be deemed an admission as to the materiality of any information required to be disclosed solely by Regulation FD. The Monthly Operating Reports and other filings with the Bankruptcy Court related to the
Chapter 11 Cases may be available electronically at
http://restructuring.primeclerk.com/sears
.
The information contained in this Item 7.01 shall
not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, and shall not be deemed to be
incorporated by reference into any of the Companys filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings,
except to the extent expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding the Monthly Operating Reports
The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Reports, which were
not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. The Monthly Operating Reports are limited in scope, cover a limited time period and have been prepared solely for the
purpose of complying with the monthly reporting requirements of the Bankruptcy Court. The Monthly Operating Reports were not audited or reviewed by independent accountants, were not prepared in accordance with generally accepted accounting
principles in the United States, are in a format prescribed by applicable bankruptcy laws or rules, and are subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in
the Companys securities, the Monthly Operating Reports are complete. The Monthly Operating Reports also contain information for periods which are shorter or otherwise different from those required in the Companys reports pursuant to the
Exchange Act, and such information might not be indicative of the Companys financial condition or operating results for the period that would be reflected in the Companys financial statements or in its reports pursuant to the Exchange
Act. Results set forth in the Monthly Operating Reports should not be viewed as indicative of future results.
Furthermore, this Form
8-K
and/or the Monthly Operating Reports may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of
historical facts, included in this filing that address activities, events or developments that the Company expects, believes, targets or anticipates will or may occur in the future are forward-looking statements. The Companys 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: the failure to obtain approval of that certain Asset Purchase Agreement entered into
by the Company and certain of its subsidiaries with Transform Holdco LLC (the Buyer), an affiliate of ESL Investments, Inc., as of January 17, 2019 (the Purchase Agreement) by the Bankruptcy Court or, if the Purchase
Agreement is approved by the Bankruptcy Court, to consummate the transaction therefrom pursuant to which the Buyer agreed to acquire substantially all of the
go-forward
retail footprint and other assets and
component businesses of the Company as a going concern, risks and uncertainties relating to the Chapter 11 Cases, including but not limited to, the Companys 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 length of time the Company will operate
under the Chapter 11 Cases, risks associated with third-party motions in the Chapter 11 Cases, the potential adverse effects of the Chapter 11 Cases on the Companys liquidity or results of operations and increased legal and other professional
costs necessary to execute the Companys reorganization; the conditions to which the Companys
debtor-in-possession
financing is subject and the risk that
these conditions may not be satisfied for various reasons, including for reasons outside of the Companys control; the impact of and ability to successfully implement store closures; the Companys ability to consummate sales of assets and
the terms and conditions of any such sales, including the Go Forward Stores; the Companys ability to implement operational improvement efficiencies; uncertainty associated with evaluating and completing any strategic or financial
alternative as well as the Companys ability to implement and realize any anticipated benefits associated with any alternative that may be pursued, including the asset sales and wind down of operations; the consequences of the acceleration of
our debt obligations; trading price and volatility of the Companys common stock and the risks related to the Companys delisting from Nasdaq and trading on the OTC Pink Market; as well as other risk factors set forth in the Companys
Annual Report on Form
10-K
and Quarterly Reports on Form
10-Q
filed with the Securities and Exchange Commission. The Company therefore cautions readers against relying
on these forward-looking statements. All forward-looking statements attributable to the Company or