US retail giant Sears will commit to its recently signed naming rights deal with the Sears Centre Arena in Illinois, according to local officials, despite filing for Chapter 11 bankruptcy on Monday.
The 11,000-seat arena, which is located in the village of Hoffman Estates, 25 miles outside Chicago, last week extended its naming rights deal with Sears through to at least August 31, 2022.
Sears has now entered bankruptcy amid piles of debt, but Hoffman Estates officials maintain the three-year deal was signed in good faith, adding that Sears is committed to paying $600,000 (£457,000/€520,000) per year over the life of the contract.
The agreement will reportedly be among the contracts that Sears lists as its obligations in bankruptcy proceedings. Village Manager Jim Norris told the Daily Herald newspaper that the Sears representative who negotiated the deal telephoned arena general manager Ben Gibbs on Monday to say the company intended to honour its commitment.
Norris added that the rate at which Sears’ financial position changed over the past week made it possible that even senior management didn’t realise a bankruptcy filing was imminent. Mayor Bill McLeod said: “The rumours about Sears have been around for some time now. We didn’t know (bankruptcy) was going to be imminent. Everything was done in good faith.”
Along with being a major concert venue, Sears Centre Arena also hosts the development team of NBA basketball franchise the Chicago Bulls and Major Arena Soccer League franchise the Chicago Mustangs.