Sears reportedly preparing to file for Chapter 11 bankruptcy protection
Sears is inching closer to filing for Chapter 11 bankruptcy protection.
The embattled, 125-year-old department store has hired M-III Partners LLC, a boutique advisory firm, to prepare a bankruptcy filing, the Wall Street Journal reported. The filing could occur as early as this week. The report comes on the heels of Sears adding restructuring expert Alan J. Carr to its board of directors. It also comes as Sears approaches a $134 million debt payment, due on Oct. 15, which the cash-strapped retailer previously warned it may not meet.
In September, ESL Investments, the hedge fund run by Sears chairman and CEO Eddie Lampert, proposed a plan that would essentially translate into a wholesale financial restructuring of the company but without a Chapter 11 filing. It includes selling off many of Sears’ remaining stores and asking lenders to exchange their loans for equity stakes in the retailer. (Some of the stores would be leased back to Sears.) It also includes an offer to buy Sears’ signature Kenmore appliances brand for $400 million. A special committee of the board is currently evaluating the proposal.
“There is a slim chance that Sears may avoid the latest bankruptcy threat, especially if lenders and stakeholders quickly agree to the restructuring program put forward by Eddie Lampert,” commented Neil Saunders, managing director of GlobalData Retail. “However, in our view, this is not a long-term solution; it is simply a way to prolong the life of a company that has long since lost the will to live.
As of its latest quarter, Sears was operating some 900 stores (Sears and Kmart) down from 4,000 plus in 2005.
CVS Health-Aetna merger gets conditional DOJ approval
CVS Health has been given the Department of Justice’s approval for its proposed acquisition of health insurer Aetna — with one condition. The DOJ’s clearance came with the requirement that Aetna divest its standalone Medicare Part D prescription drug plans — a move that already has been announced, with WellCare Health Plans set to take over the plans, which have roughly 2.2 million members. Under the agreement with WellCare, Aetna will administrate and retain financial results from the plans through 2019.
“DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer healthcare experience,” said CVS Health president and CEO Larry J. Merlo. “We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna. We are now working to complete the remaining state reviews.”
CVS Health noted that several state regulatory approvals have already been granted, and that the acquisition is now on track to close in the early part of the fourth quarter of 2018. Once the merger is complete, Aetna will operate as a standalone business within CVS Health’s enterprise, led by current members of its management team.
“CVS Health and Aetna have the opportunity to combine capabilities in technology, data and analytics to develop new ways to engage patients in their total health and wellness.” Merlo said. “Our focus will be at the local and community level, taking advantage of our thousands of locations and touchpoints throughout the country to intervene with consumers to help predict and prevent potential health problems before they occur. Together, we will help address the challenges our health care system is facing, and we’ll be able to offer better care and convenience at a lower cost for patients and payers.”
Walgreens mobilizes ahead of Hurricane Michael
Walgreens on Tuesday announced that it was preparing its customers, employees and communities in the expected path of Hurricane Michael ahead of it making landfall, including plans to support areas impacted in the aftermath of the storm.
Walgreens said that it was emphasizing the importance of prescription preparedness for patients in areas that are expected to be impacted. With a state of emergency declared in parts of Florida, Walgreens said pharmacists can refill up to a 30-day supply of medication without refill authorization for any non-controlled substance. It also noted that patients should carry their medications in a waterproof bag, even if a bottle is empty, as label information can assist in a refill request.
Additionally, the company is staging mobile pharmacies near the region that it said it would deploy if necessary to damaged drug stores, as well as emergency power generators for areas that lose power.
“We urge our patients and customers to follow state of emergency directives and if necessary get to a safe location first and then refill medications at the nearest pharmacy. Walgreens will continue to support the health and wellness needs of our customers and communities facing this dangerous storm,” said Richard Ashworth, Walgreens president of operations. “We have a dedicated team in our Emergency Operations Center working to ensure our team members in the storm’s path remain safe and are preparing to rapidly restore operations in order to best serve our patients and communities.”