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The Sears store located at the Erin Mills Town Centre in Mississauga, OntFred Lum/The Globe and Mail

Insolvent Sears Canada Inc. is ready to give its executive chairman another month to firm up his bid for the company, even as the retailer pushes ahead with a flurry of sales of its assets to others, raising more doubts about its long-term survival.

Sears, which won court protection from its creditors in June, will ask the Ontario Superior Court on Wednesday to approve a number of sales, including some that would result in 11 more stores closing and 1,200 more employees losing their jobs after the outlets are liquidated. In June, it announced that 2,900 other workers were being let go without severance and 59 of its 255 outlets were closing.

As well, Sears will ask the court to extend its protection period until Nov. 7. And it will ask for a green light to sell its Viking trademarks to Canadian Tire Corp. Ltd. and seek approval to sell the lease of its Calgary distribution centre to Indigo Books & Music Inc.

Read more: Sears Canada executive chairman rushing to assemble takeover bid (for subscribers)

"It's like the bones are being picked," a source close to the process said. "They're selling every little thing off – a distribution centre, trademarks, leases. It all sounds like a liquidation to me."

In selling off assets, Sears is making it more difficult for the bid, from a group led by its executive chairman, Brandon Stranzl, to succeed because his offer involved many of those items such as the Viking trademarks and the stores now earmarked to be closed and liquidated.

Sears said the bid by Mr. Stranzl, who stepped down in August from his day-to-day duties as executive chairman but still kept the title, has a number of financing and due diligence conditions that prevent Sears from approving his offer right now.

Mr. Stranzl provided an updated version of his bid on Sept. 25 following his initial one Aug. 31, but his amended proposal was also rejected. "It's a long shot," one source close to the talks said last week. "It's not firm enough. … We're running out of time."

Mr. Stranzl's management bid is a last-ditch effort to keep Sears running as a going concern because the other offers are for parts of the business and would break it up and liquidate the operations. The Sears court protection process comes after years of declining results and annual losses since 2014.

"Understanding, among other components, the role a successful bid could play in saving jobs, Sears Canada advisers continue to engage with Mr. Stranzl with the goal of enhancing the value and reducing the conditionality of the proposed transaction," Sears said in a press release on Friday night.

It said it had agreements to sell 11 leases, all but one of them being full department stores and the other a Sears Home store in Kelowna, B.C.

The others include Sears stores in Fairview Mall in Toronto, Oakville Place in Oakville, Ont., Scarborough Town Centre in Toronto, Fairview Pointe-Claire in Montreal, Polo Park in Winnipeg, Lime Ridge Mall in Hamilton, Brentwood Town Centre in Burnaby, B.C., and Avalon Mall in St. John's.

Sears also has a deal to sell its Garden City store in Winnipeg, which is co-owned by RioCan Real Estate Investment Trust. RioCan bid for the Garden City property after Sears had already accepted a $5-million offer for it from WCRE Investments Ltd. Lawyers representing former employees recently were successful in arguing that RioCan's offer for $1-million more should be allowed to proceed because it would give more money to creditors, including former employees.

Edward Sonshine, chief executive of RioCan, said last month the property – which includes the adjacent parking lot and a store that's been closed for a while – wasn't part of the original insolvency filing "and therefore wasn't on our radar screen until our partner brought it up."

In addition, Sears has deals to sell its SLH Transport Inc. division and three home-improvement businesses, such as duct cleaning and heating and cooling services.

Mr. Stranzl had originally envisioned keeping virtually all the remaining Sears department stores, but Sears received offers for at least 11 of them that were worth more than they were valued at in the Stranzl proposal, sources said.

But another source familiar with the process said: "It means hundreds of people have lost their jobs, and those [lease] sales were all done at fire-sale prices. With no notice to the single bidder for Sears Canada."

Sears is overseeing the sale process along with its debtor-in-possession lenders under the Companies' Creditors Arrangement Act (CCAA).

Mr. Stranzl, who has been scrambling for months to put together his management bid, has in his latest offer a bid to buy roughly 60 stores operating as Sears.

As it stands, Sears has until Oct. 25 to finalize sales, according to court documents. But it will ask the court to extend its CCAA protection until Nov. 7 from Oct. 4.

In all, Sears received roughly 70 bids, many of them for single or clusters of stores or other properties or businesses, sources said. Some of the offers were frivolous and rejected quickly and many of the bids overlapped, giving Sears and its advisers a mountain of material to sift through, sources said.

Sears is still in talks to sell more of its businesses, properties and leases to individual buyers, sources said. They include a Sears store in Promenade Mall north of Toronto, where Mr. Stranzl has steered the creation of his Sears 2.0 prototype store with new off-price discounted fashion and home decor lines borrowed from the Winners playbook and private-label clothing lines.

Sears has also been in discussions with real estate group Bentall Kennedy (Canada) LP about selling some of its Sears store leases, sources said.

Landlords who have bid to buy back their leases want control over future tenants, although their bids have been relatively low, sources said. And some may even agree to lease the stores back to Sears if Mr. Stranzl's bid survives, as a stop-gap measure as they prepare more long-term plans for their space, with conditions of being able to get the stores back in the short term, they said.

Mr. Stranzl's bid includes roughly $25-million to $30-million of financing from a California investor as well as about $250-million to $275-million of debt financing from institutional and other players, a source familiar with the situation said. The California player involved is Vadim Perelman, who runs Baker Street Capital Management and has had past dealings with Mr. Stranzl.

Most of the debt financing would have been secured against $400-million of inventory, although some of that merchandise will now by liquidated, while some of the financing would be secured against 10 owned properties, the source said. Mr. Stranzl's deal also entails the assumption of about $350-million of liabilities from employee severances and leases, the source said.

Meanwhile, Edward Lampert, CEO of U.S.-based Sears Holdings Corp. – which together with his hedge fund owns 57 per cent of Sears Canada, is not involved in the bidding or in financing Mr. Stranzl's bid, the court documents confirm.

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