Out-of-Court 'Tankruptcy' Looms as Clock Ticks for Orchard - Off 93.3% in 52-Week Low

Orchard Supply Hardware ( OSH ) is facing possible default on a payment of a $55.2 million loan if it does not strike a deal with lenders by May 1. Orchard Supply has hired lawyers, financial advisers and others to discuss with lenders an out-of-court restructuring or "prepackaged bankruptcy filing," according to The Wall Street Journal.

Confirming Orchard's woes, the GuruFocus 52-week low screener reveals that Orchard Supply Hardware ( OSH ), the Sears home and garden improvement spin-off, has dropped another point this week, off by 93.3%. OSH shares are priced at $1.87, from the high of $27.93. The 52-week low value screen also shows that investor savant and visionary Sears CEO Edward Lampert is still holding on to slightly over a million shares, but reducing consistently in increments.

Orchard Supply Hardware's 2012 revenue is $660.7 million; its debt is $254 million. The company reported net sales for the fiscal year ended Jan. 28, 2012 of approximately $658 million.

As of April 12, 2013, Edward Lampert , also founder of ESL Investments, reduced his Orchard Supply Hardware ( OSH ) position again by 0.25%, with remaining shares at 1,002,829. He traded at an average price of $2.14. The current price is $1.86, with a change from average down 13%.

Prior to his most recent trade, Lampert reduced his OSH position by 2.12%, on April 11, and pruned back the ailing Orchard multiple times this quarter. Since first quarter 2012, between shares bought and sold, Lampert's average cost per share was $27, for a 93% loss.

His holding history:

Meeting fierce competition in the home improvement and yard-care market, Orchard Supply has another legal issue. Last December Orchard Supply Hardware filed a lawsuit against The Home Depot and two power tool makers, Milwaukee Electric Tool and Makita USA, claiming that the companies were running an unlawful group boycott.

With the clock ticking, will the former Prune Palace of the Dust Bowl days find a way to restructure its balance sheet? Only the Guru knows.

According to Forbes, Guru Eddie Lampert is a self-made billionaire with a net worth of $3.1 billion as of March 2013. He is 437th on Forbes Billionaires list of the richest people on the planet, and he is 125th on the Forbes 400 list of richest people in America. His hedge fund, ESL Investments, has a portfolio that lists 11 stocks, with a total value of $3.8 billion, and a quarter-over-quarter turnover of 8%.

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a7-day Free Trial.

Check out the GuruFocus special feature 52-week low screener. This special feature helps you find the stocks hitting new lows but are still held by top investor Gurus and Insiders. If billionaire Gurus own these stocks and are still increasing their positions, it means that they believe the stocks are undervalued. Researching these stocks may help you find deep valued stocks.

About GuruFocus: tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos