NEW YORK (CNN Business) – If Sears wants to avoid bankruptcy, it’ll practically have to pull a rabbit out of a hat. The company thinks it found a director who can help do the trick.
Sears (SHLD) announced Tuesday that it hired Alan Carr as an independent director. Carr is CEO of restructuring advisory firm Drivetrain, which guides companies through complex transformations such as the one Sears’ management has endorsed.
With $134 million worth of debt payments coming due October 15 and a dwindling cash hoard to pay it back, Sears is desperately trying to restructure its debt this week to avoid bankruptcy. Sears wants to reduce its debt load by 80%, hoping creditors will bite at the chance to make a deal while the company is still a going concern.
But many flailing retailers have tried that tactic before and failed (see: Toys “R” Us). Creditors will probably want to try their hand in bankruptcy court, where they might be able to get a slightly better return.
Sears hopes Carr can be the salesman it needs to win over creditors. If not, he could guide Sears through a bankruptcy — he was previously a bankruptcy attorney at New York law firm Skadden Arps.
“Alan brings deep experience as a director for companies that went through complex organizational change,” said Sears CEO Eddie Lampert, in a statement. “We are pleased to welcome him to the board and look forward to the benefit of his expertise as we work to maximize value for the company and its stakeholders.”
Sears’ stock is down 83% this year, to below $1 a share. Shares fell 3.5% on Tuesday.