Shares of Sears Holdings Corp (SHLD) plummeted on Tuesday morning after reports were released that the company will be borrowing $400 million from its CEO’s hedge fund, ESL Investments. The company has been seeking cash for its turnaround as it has reported a net loss for the last nine quarters.

Inside Sears’ Struggle

The department store has been struggling during the past few years, seeing its last profitable year in 2011. In addition to its losses, the company’s annual revenue has been dropping every year since 2007.

The company’s cash flow problems have led it to seek long-term capital-structure flexibility from lenders, as well as massive cost cutting.

With the recent news of its CEO Edward Lampert borrowing cash from the hedge fund that he manages, many investors are even more weary of the future of Sears Holdings.

Mutual Funds to Watch

Mutual funds investors that own funds with exposure to Sears should pay close attention to the company’s future actions and stock price. Below are the mutual funds with the largest stake in Sears.

The Bottom Line

While Sears’ turnaround is questionable, some investors see an upside in the company. Regardless of the future of the retailer, any exposure to this company carries a significant amount of risk.

Conservative mutual fund investors should be cautious when investing in a mutual that has a significant holding in this company.