Lampert’s Sears Bid Targets Tax Offsets Possibly Worth Billions

Former Sears Holdings Corp. CEO Eddie Lampert’s hedge fund is shaping its bid for Sears to substantially shrink future tax burdens thanks to a quirk in the tax code, according to a source familiar with the fund’s plans.

ESL Investments Inc., Lampert’s hedge fund and a major Sears shareholder and creditor, submitted a Dec. 5 letter indicating its interest in a purchase of the company for $4.6 billion.

Sears’ deferred tax assets were “incorporated” into the acquisition bid price, according to the proposal letter. The company’s federal net operating loss deferred tax assets totaled $1.7 billion as of February, according ...