Reuters reports that hedge funder Eddie Lampert, the chairman of bankrupt and close-to-oblivion Sears Holdings, has “submitted a revised takeover bid of more than $5 billion for the company,” up from his previous bid of $4.4 billion, which was rejected by the company in favor of liquidation.

The story says that “his new bid, made through an affiliate of his hedge fund ESL Investments Inc, assumes more than $600 million in liabilities, including taxes, vendor bills and other expenses Sears has incurred since filing for bankruptcy protection last October … Sears will consider Lampert’s offer against a possible liquidation during a Jan. 14 bankruptcy auction.”

A number of Sears creditors seem to believe that liquidation actually affords them a better chance to recoup some of the money Sears owes them; they also think that additional monies can be gotten back through legal actions against Lampert over deals. Lampert has tried to get the courts to immunize him from legal actions as part of any takeover bid.

Reuters writes that “to finance the new offer, ESL has received debt commitment letters from lenders for a new asset-backed loan.
ESL and hedge fund Cyrus Capital Partners LP, which was a creditor of Sears before its bankruptcy, will also provide debt financing, including a new real estate loan, according to the filing.”

KC's View: This is why I’m not a banker. (Well, one of the reasons. Another might be that I hate math. And suits and ties.) But I cannot fathom why anyone would lend Lampert more than about 12 cents for him to put into Sears at this point. Almost nothing he has done has worked, and the company is in demonstrably worse shape now than when he bought it.