#debt

https://commsrisk.com/verizon-turnaround-not-likely/

The U.S. National debt is -

(Currently) $38.7 Trillion (and rising) per U.S. usdebtclock.

AI will take away (most) computer dependent jobs in the future (not all) but enough for the Unemployment rate to spike significantly thus reducing Tax revenue.

So Income Tax, and Corporate Tax will (need) to be Increased (especially) on Corporations, and the wealthy; to be able to cover it.

Reality is, even with the Trump Import tariffs that were nullified ($200.0 Billion a year with refunds of $125.0+ Billion in process back to Corporations-businesses) by the Supreme Court it wouldn't even faze the (current) $990.0 Billion (and rising) a year in Interest paid by U.S. taxpayers to outside Investors that finance the U.S. National debt.

These are the facts.

Are we in massive debt over HIH? Is that why so many quality people are being laid off? To pay off that debt?

Just incase anyone was wondering. Payments on this new $405M loan work out to roughly $49,931 PER DAY 365 days per year until march 30th of 2031... and on April 1st 2031 Theres a balloon payment due of just a hair shy of $323,000,000.

OR $69,827 EVERY SINGLE WORKING DAY. $8728/hr... every working hour, for five years.

Think about this for a moment. Carl was brought on “board” and so followed our CEO who Carl brought with him. Eventually they bought our Carl who was known for selling off pieces of companies until nothing was left. I think our CEO is still aligned with him. He alone has sold off everything and anything that was tangible. In all seriousness, what remains owned by Xerox? (Besides debt)

They just borrowed another 475m at an 7.5% interest and a 2% royalty on top!

They call it a joint venture.

ROFL

some will be asked to take pay cuts to reduce debt!

Updated - T, 2/10/26.

AI Innovation -

1) Software Firms.

2) Private Credit Firms.

3) Insurance Brokerage Firms.

4) Wealth-Management Firms.

While AI contributes many useful innovations towards society, and will create (some) related jobs.

The stocks of those respective industries are (currently) being sold-off within the Global markets.

The unemployment rate will increase (along with layoffs) the U.S. National debt (currently) at $38.7 Trillion (and rising) per usdebtclock will have (less) contributions from U.S. taxpayers (in general) unless Corporations, and the wealthy; pay more.

This list is going (not if) expand over time, if the job is computer dependent; AI can (and will) take its' place.

AI Innovation -

1) Software Firms.

2) Private Credit Firms.

3) Insurance Brokerage Firms.

4) Wealth-Management Firms.

While AI contributes many useful innovations towards society, and will create (some) related jobs.

The stocks of those respective industries are (currently) being sold off within the Global markets.

The unemployment rate will increase (along with layoffs) the U.S. National debt (currently) at $38.7 Trillion (and rising) per usdebtclock will have (less) contributions from U.S. taxpayers (in general) unless Corporations, and the wealthy; pay more.

This list is going (not if) expand over time, if the job is computer dependent; AI can (and will) take its' place.

What’s the chance LE, Safra Catz, Clay and Mike might be named eventually in a SEC lawsuit for fraud and materially falsifying information to investors over its debt capacity? I think it’s pretty likely. Especially if they sell Cerner.

I just want to reassure everyone that whatever happens with Oracle and its debt, LE will come out on top and unscathed. He is five steps ahead of everyone else playing the game, and his (and his family’s) nest egg will only continue to grow. Everything else is noise. If you choose to play in this space, rest assured, he will burn you.

https://seekingalpha.com/news/4545115-oracle-plans-massive-50-billion-debt-and-equity-raise

If stock prices fall to 154 or below on Monday / Tuesday, better be prepared to leave.
I also doubt Fusion in addition to legacy apps will be more badly hit in addition to Cerner.
Most people reporting to LE org might be in trouble or waiting for reorg.

Personally, I think MicroFocus was already ruined financially before the acquisition, while OpenText has suffered taking on massive debt and legacy baggage that has stalled any momentum we had previously with Cloud and Cybersecurity.

Something doesn't add up.

Aside from the cash for shares at $8, which only a lunatic would exercise, I would like to test my understanding of the debt instrument exchange.

Am I correct that bondholders can essentially "self-call" their bond, benefiting Xerox by having the obligation to pay interest removed? If yes, what is the value to the bondholder who now holds a variable dividend equity position based on their bond par value in a company that may not recover?

Q4 only looks “good” if you stop at the headline: revenue jumped +26%, but that’s almost entirely because Xerox bought Lexmark.

Strip that out and the underlying business is still shrinking by 9%. Cash is the real story: free cash flow for 2025 fell to about $130M, down from roughly $470M last year, a MASSIVE drop at the exact moment debt is crushing the company.

The snapshot that truly matters: Xerox has roughly $500M in cash, $4+ billion in debt, and only about $400–450M of equity left.

Goodwill sits around $2+ billion (Goodwill Guy will check this), meaning one big write-down and equity is basically gone on paper.

Interest expense alone is running close to $250M A YEAR. This is why management rolled out the warrant scheme before earnings as an attempt to reduce debt without spending cash and without going to bankruptcy court.

Q4 proved the company is operationally alive but financially boxed in.

The warrants, the timing, the messaging... all of it points to one thing: advanced financial engineering to avoid Chapter 11, not confidence in growth.

This is what survival mode looks like when you still want to stay in control.

IBM isn't a healthy company

https://techrights.org/n/2026/01/29/IBM_s_Financial_Performance_in_IBM_s_Own_Words_Money_Down_Debt_.shtml

They failed to pay my last salary. I left Dell on my own terms and they haven’t made the last salary payment. Never could I ever imagine I’d have to start a debt collection process against one of the richest companies in the world!

For those that are being WFRd, please check your payments and check that taxes are paid correctly.

Desperate times call for desperate measures. The dividend has got to go. It's only $13m a year, but XRX needs the $$ to pay interest. XRX should have fully eliminated the dividend when Carl left. Also, how stupid would it be to issue more shares without cutting out the dividend. XRX must go into serious cash preservation mode.

Why is Oracle struggling?
However, unlike its largest competitors, whose profits are paying for their data center projects, Oracle is borrowing heavily. Some investors are concerned the company will struggle to repay its debt if AI demand falls short of expectations. Oracle's business with OpenAI has added to investor concerns

This is what the Trump administration -

Needs to be concerned about (like previous administrations) since 2008.

The U.S. National debt - $38.7 Trillion (and rising) with a debt-to-GDP ratio of 124.03% (current) per usdebtclock.

This means that the U.S. National debt is (currently) 124.03% of the U.S. economy.

At some point in time, even with GDP artificially growing (for now) but be aware that the LEI - Leading Economic Indicator has been Down from September 2024 - September 2025.

(Every time in U.S. history) when the LEI has dropped below the CEI - Coincident Economic Index (current state of the U.S. economy) a Major recession has ensued (thereafter).

2001 > 2008 > 2020 (Brief).

(2) things -

First, the U.S. government shutdown prevented data from appearing (waiting) for Q4 2025.

Second, Fed stimulus being injected is preventing (for now) the Major recession that is already technically here; at least for Main Street; I believe that it will come for Wall Street.

Those signs will appear stronger as 2026 progresses, Corporate layoffs ramping up again Q1 2025 (March - April) timeframe; small business activity (ramp-down); etc.

See the Trees through the Forest.

Poor Warner Media. I was just reading about how messed up WBD is following the AT&T debacle and I was wondering to myself, 'what went so wrong'. So, like a true att employee, I asked Google. Funny thing is that the problems that ki-led what should have been the deal of a lifetime are still here!

Financial mismanagement, soaring debt, cultural and social conflicts, strategic failures, poor leaders and inconsistent leadership, execution & delivery problems, and, att's goto optimization strategy, layoffs!

It is shameful to think that the same leaders who destroyed a film industry pioneer are doing the same thing to a telecom pioneer and we are watching it happen in real time. I hope i'm wrong but I believe this Plano relo will be the final nail in the coffin for AT&T. Our leadership knows what they are doing. Think about this, we are sitting on $140 BILLION in debt.

Put in in perspective. When you are in debt, what do you do? You tighten the belt. Cut some cost, cancel some streaming services. Do you sell your house? Maybe, but that's like the last ditch effort. Let me remind you of an old company called Sears Roebuck. Remember them? They were on top of the world and had this iconic skyscraper. Then, things started unraveling. Sears tried to acquire businesses but was never able to capitalize. They tried pushing their brand on everything and everywhere. Soaring debt sent them to a large corporate park on the outskirts of Chicago. Sears was a blue-chip, dividend market leader. They were literally the amazon of the 20th century. They even had a sports stadium. Where are they now? 5 stores, a website, distribution agreements, and a brand that they pray someone, someday, will want to reboot.

There's your future, people. We are Sears.

Sorry Warner. Best of luck.

OK, here is the money crunch. There was ~$479,000,000 in cash or equivalents on the books on 9/30/25.

Great! (not really)

There are also 27,000 people on payroll. Divide the numbers and you get $17,740 per person. Great? No, not really.

Some people make a lot, some make terrible money. If the mean salary is $50,000/year and you divide that into $17,740, you get 35.4% of a year - or about 90 days of payroll.

Money is coming in still but this, and overhead, the cost of goods, and most importantly, the debt load, is too much to survive. The only way they can survive is to borrow money and they can't. It's too late to fire their way out of this, hence the lack of trying.

There are two smaller debt payments (both around $100 mil) due this year. Either one could end the ballgame.

The (2) contributors for a Major recession when they do (and have) happened during U.S. economic-financial history are Unemployment, and a Major Downturn in consumer spending; currently (70%) of GDP (Gross Domestic Product) as shown in the PCE (Personal Consumption Expenditures Index).

2025 - Worst year of job growth since 2020, just reported.

2025 - Worst year of layoffs since 2020 (1.17 million), just reported.

2025 - The seven (7) U.S. debt bubbles at the highest level in U.S. history with (all of them) at (record) levels, just reported.

The (7) Debt bubbles - Household spending, mortgage loans; credit card debt, automotive loans; student loans, stock purchase financing; and finally the U.S. National debt.

The U.S. National debt (currently) is at $38.6 Trillion (and rising) with Interest paid per year by U.S. taxpayers at $968.0 Billion to outside Investors who finance it per usdebtclock.

Currently (skewed) U.S. GDP (positive data) is from AI corporate infrastructure spending, and higher income household spending.

Both of those things will (not if) revert Downwards over time impacting U.S. GDP negatively.

Note - The stock market, and U.S. economy are (not) the same thing.

It is called Divergence that (currently) exists between them (for now).

The (2) contributors for a Major recession when they do (and have) happened during U.S. economic-financial history are Unemployment, and a Major Downturn in consumer spending; currently (70%) of GDP (Gross Domestic Product) as shown in the PCE (Personal Consumption Expenditures Index).

2025 - Worst year of job growth since 2020, just reported.

2025 - Worst year of layoffs since 2020 (1.17 million), just reported.

2025 - The seven (7) U.S. debt bubbles at the highest level in U.S. history with (all of them) at (record) levels, just reported.

The (7) Debt bubbles - Household spending, mortgage loans; credit card debt, automotive loans; student loans, stock purchase financing; and finally the U.S. National debt.

The U.S. National debt (currently) is at $38.6 Trillion (and rising) with Interest paid per year by U.S. taxpayers at $968.0 Billion to outside Investors who finance it per usdebtclock.

Currently (skewed) U.S. GDP (positive data) is from AI corporate infrastructure spending, and higher income household spending.

Both of those things will (not if) revert Downwards over time impacting U.S. GDP negatively.

Note - The stock market, and U.S. economy are (not) the same thing.

It is called Divergence that (currently) exists between them (for now).

It amazes me that (some) employees at Charles Schwab do (not) even understand basic U.S. economics -

The (2) contributors for a Major recession when they do (and have) happened during U.S. economic-financial history are Unemployment, and a Major Downturn in consumer spending; currently (70%) of GDP (Gross Domestic Product) as shown in the PCE (Personal Consumption Expenditures Index).

2025 - Worst year of job growth since 2020, just reported.

2025 - Worst year of layoffs since 2020 (1.17 million), just reported.

2025 - The seven (7) U.S. debt bubbles at the highest level in U.S. history with (all of them) at (record) levels, just reported.

The (7) Debt bubbles - Household spending, mortgage loans; credit card debt, automotive loans; student loans, stock purchase financing; and finally the U.S. National debt.

The U.S. National debt (currently) is at $38.6 Trillion (and rising) with Interest paid per year by U.S. taxpayers at $968.0 Billion to outside Investors who finance it per usdebtclock.

Currently (skewed) U.S. GDP (positive data) is from AI corporate infrastructure spending, and higher income household spending.

Both of those things will (not if) revert Downwards over time impacting U.S. GDP negatively.

Note - The stock market, and U.S. economy are (not) the same thing.

It is called Divergence that (currently) exists between them (for now).

source: https://therobinreport.com/saks-global-another-trainwreck/

01.07.26: The Robin Report: Saks Global: Another Trainwreck by Mark Cohen

Saks Global is Richard Baker’s next and maybe his final retail failure. Lord & Taylor, The Hudson Bay Company in all its various iterations in Canada and Europe, and now the monstrosity he recently created by putting Saks Fifth Avenue, Saks Off Fifth, Neiman Marcus and Bergdorf Goodman together, teeters on bankruptcy. This recent disaster is the result of the company’s failure to make a required $100 million interest payment to lenders at year’s end.

Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure.

Baker Shadow Play

Baker suddenly appeared on the retail scene in 2006 when his real estate company, NRDC, bought Lord & Taylor from the newly branded Federated/Macy’s Corporation, which inherited L&T when it acquired May Company stores. Then, in 2008, Baker acquired control of The Hudson Bay Company following the untimely death of its majority shareholder. Three years later, in 2011, Baker’s HBC sold its Zeller’s stores in Canada to Target Corporation for $1.8 billion. Kudos to Baker, as most of the Zeller’s store locations were arguably worthless as hapless Target would soon find out.

When I was Director of Retail Studies at the Columbia Business School, I attended a student-led Retail and Luxury Goods Conference in 2012, keynoted by Baker. He gave a rambling off the cuff 40-minute presentation in which he regaled the 250 students and guests in the audience about how great it was to be rich; how he did little work at Wharton having surrounded himself with “good looking babes” eager to do his work; and how he had just “stolen” Lord & Taylor from Federated for $1.2 billion. Narcissism aside, he was likely correct in his view that Federated could not wait to unload L&T as an outlying May Company property. He went on to talk about how easy it was to master the art of merchandising based on his exposure to L&T’s business. Completely put off by this performance, I was unfortunately seated in a location that precluded me from leaving early.

Next in 2013, Baker acquired Saks Fifth Avenue and Saks Off Fifth stores in what might be described as another triumph of price over value. Saks’ management had failed to fully recognize the leverage it could have used on its own behalf based on its Fifth Avenue store’s real estate valuation. Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure. His stewardship of Lord & Taylor was pathetic.

In an effort to cut expenses, he attempted to rationalize back-of-the-house activities between Canada-based Bay stores and American-based L&T stores, which may have made sense to some clueless consultant but never worked in retail reality. He then came up with a scheme to downsize the L&T Fifth Avenue flagship and sold the building to that other paragon of business strategy, WeWork, eventually ki-ling the L&T brand.

Baker and The Bay

The disruption and ultimate liquidation of The Bay’s principal competitor in apparel, accessories and soft home, Sears Canada, should have resulted in a once-in-a-lifetime opportunity, but The Bay failed to capitalize on it.

Moving Saks Fifth Avenue stores into The Bay stores spaces in Canada and introducing Saks Off Fifth in Canada was another failed initiative. In fact, moving Saks Fifth Avenue into a cavernous “low-brow” Bay location on Queen Street adjacent to the Eaton Center in Toronto was an incredible misstep in and of itself. The physical space was available, but the luxury customer certainly wasn’t there.

Opening over a dozen Bay department stores in the Netherlands in 2017 was another bone-headed move. Baker did a complex deal with Germany-based Galeria Karstadt Kaufhof, securing retail space in the Netherlands, but again the customer just wasn’t there. Allegedly, Baker believed that since the Canadian Army liberated the Netherlands from the Na-is at the end of WWII, the Dutch would welcome a Canadian company with open arms. It didn’t happen. The Dutch Bay stores were all closed by 2019. The customers who might have remembered being liberated in 1945 were either dead or too old to patronize a Canadian-owned department store. Baker claimed he made money on this ridiculous foray, and he may very well have, but the Dutch paid a terrible price for this catastrophe.

Baker Business Model

In 2024, Baker set his sights on acquiring Sak’s principal competitor, Neiman Marcus/Bergdorf Goodman. The timing wasn’t great. There was the disappearance of luxury competitor Barney’s, and the Saks business at best treaded water. Also, Neiman Marcus/Bergdorf Goodman was struggling to put a challenging Chapter 11 Bankruptcy proceeding behind it.

There was also the monetization of hbc.com and saks.com, which raised a considerable amount of money from a group of hapless investors. These investors did not realize how completely counterproductive this strategy would prove to be.

Along the way, Richard Baker has presided over a never-ending list of lead executives, many of whom barely lasted two years with the company. There was Tina Johnson, Jeff Sherman, Bonnie Brooks, Jerry Storch, and Helena Foulkes, among others. And then there was Marc Metrick, whose 30-year tenure with Saks has just come to an abrupt end. But maybe it was 30 years too long. Metrick was a planning executive at Saks who, in recent years, masqueraded as its lead merchant.

Debt Economics

The history of two weak and/or weakened retail companies merging and finding success is simply this: There is no history. Add to that the non-starter of two companies that essentially do business with the same customer and in many cases in the same geographic locations. But these hurdles didn’t stop Baker from consummating a debt-laden merger of two icons. And incomprehensibly, for well over a year, the company failed to pay many of Saks’ vendors either on time or in many cases at all. So, now both companies have just completed a poor 2025 in sales. And having been cut off from receiving fresh inventory by a cynical factor community, Saks Global just failed to make that $100 million year-end interest payment.

Baker in Bankruptcy

Maybe Baker will come up with a bundle of new cash. If business remains as poor as it has been, any new cash infusion would only be a stopgap measure. Alternatively, the company might come up with a prepackaged restructuring agreement with its creditors. Or it will surrender to a voluntary or involuntary bankruptcy proceeding.

I’m not a bankruptcy attorney, but having lived through Federated department store’s successful restructure, and an up close and personal experience with Bradlees stores eventual failed emergence from bankruptcy, I think the bell may soon toll for Saks Global.

If it files for Chapter 11 financial relief, creditors organize and line up based upon their preexisting credit agreements (or lack thereof). Secured creditors, typically the company’s lenders, rely on collateral rights while unsecured creditors, typically vendors and service providers, hope for some eventual relief through the bankruptcy process. All payables from the company, whether current or past due, are frozen.

In a bankruptcy, legal and financial restructuring professionals line up for a typically substantial fee opportunity. A new lender or a consortium of lenders emerges to provide Debtor in Possession funding to enable the company to stay upright while in bankruptcy. All vendors are asked to resume shipping based on the newly created surety of DIP financing.

But, lacking confidence that past due receivables will eventually be paid, many vendors resort to selling their company receivables to distressed debt (or vulture) investors for substantial discounted values. This, in my opinion, is a terrible flaw in the bankruptcy process in that unsecured vendors, who you would expect to have a stake in the company’s eventual successful emergence from bankruptcy, have now traded places with investors seeking a fast financial return.

Saks Global at Risk

If Sak’s Global were operating as a stable platform with a successful sales and margin track record, with capable senior leadership, a reliable operating strategy, and good relationships with its vendors and customers, there would be ample reason for the company to navigate through bankruptcy and emerge with new debt and a newly restructured balance sheet. But none of this appears to be the case. As 2026 unfolds to what will undoubtedly be a challenging year for all retailers, the prospects for Saks Global are truly grim. My sense is that many vendors long ago stopped shipping or have curtailed their support for Saks, Neiman Marcus and maybe even Bergdorf Goodman, and they are unlikely to get back on board after having been egregiously abused these past few years.

Many will find another retailer to serve their customers if they haven’t already done so or continue to build a direct-to-consumer model of their own. Why wouldn’t they? Who needs the sturm und drang of a failing retail partner who doesn’t pay its bills? If that happens, Saks Global is toast.

source: https://therobinreport.com/saks-global-another-trainwreck/

01.07.26: The Robin Report: Saks Global: Another Trainwreck by Mark Cohen

Saks Global is Richard Baker’s next and maybe his final retail failure. Lord & Taylor, The Hudson Bay Company in all its various iterations in Canada and Europe, and now the monstrosity he recently created by putting Saks Fifth Avenue, Saks Off Fifth, Neiman Marcus and Bergdorf Goodman together, teeters on bankruptcy. This recent disaster is the result of the company’s failure to make a required $100 million interest payment to lenders at year’s end.

Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure.

Baker Shadow Play

Baker suddenly appeared on the retail scene in 2006 when his real estate company, NRDC, bought Lord & Taylor from the newly branded Federated/Macy’s Corporation, which inherited L&T when it acquired May Company stores. Then, in 2008, Baker acquired control of The Hudson Bay Company following the untimely death of its majority shareholder. Three years later, in 2011, Baker’s HBC sold its Zeller’s stores in Canada to Target Corporation for $1.8 billion. Kudos to Baker, as most of the Zeller’s store locations were arguably worthless as hapless Target would soon find out.

When I was Director of Retail Studies at the Columbia Business School, I attended a student-led Retail and Luxury Goods Conference in 2012, keynoted by Baker. He gave a rambling off the cuff 40-minute presentation in which he regaled the 250 students and guests in the audience about how great it was to be rich; how he did little work at Wharton having surrounded himself with “good looking babes” eager to do his work; and how he had just “stolen” Lord & Taylor from Federated for $1.2 billion. Narcissism aside, he was likely correct in his view that Federated could not wait to unload L&T as an outlying May Company property. He went on to talk about how easy it was to master the art of merchandising based on his exposure to L&T’s business. Completely put off by this performance, I was unfortunately seated in a location that precluded me from leaving early.

Next in 2013, Baker acquired Saks Fifth Avenue and Saks Off Fifth stores in what might be described as another triumph of price over value. Saks’ management had failed to fully recognize the leverage it could have used on its own behalf based on its Fifth Avenue store’s real estate valuation. Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure. His stewardship of Lord & Taylor was pathetic.

In an effort to cut expenses, he attempted to rationalize back-of-the-house activities between Canada-based Bay stores and American-based L&T stores, which may have made sense to some clueless consultant but never worked in retail reality. He then came up with a scheme to downsize the L&T Fifth Avenue flagship and sold the building to that other paragon of business strategy, WeWork, eventually ki-ling the L&T brand.

Baker and The Bay

The disruption and ultimate liquidation of The Bay’s principal competitor in apparel, accessories and soft home, Sears Canada, should have resulted in a once-in-a-lifetime opportunity, but The Bay failed to capitalize on it.

Moving Saks Fifth Avenue stores into The Bay stores spaces in Canada and introducing Saks Off Fifth in Canada was another failed initiative. In fact, moving Saks Fifth Avenue into a cavernous “low-brow” Bay location on Queen Street adjacent to the Eaton Center in Toronto was an incredible misstep in and of itself. The physical space was available, but the luxury customer certainly wasn’t there.

Opening over a dozen Bay department stores in the Netherlands in 2017 was another bone-headed move. Baker did a complex deal with Germany-based Galeria Karstadt Kaufhof, securing retail space in the Netherlands, but again the customer just wasn’t there. Allegedly, Baker believed that since the Canadian Army liberated the Netherlands from the Na-is at the end of WWII, the Dutch would welcome a Canadian company with open arms. It didn’t happen. The Dutch Bay stores were all closed by 2019. The customers who might have remembered being liberated in 1945 were either dead or too old to patronize a Canadian-owned department store. Baker claimed he made money on this ridiculous foray, and he may very well have, but the Dutch paid a terrible price for this catastrophe.

Baker Business Model

In 2024, Baker set his sights on acquiring Sak’s principal competitor, Neiman Marcus/Bergdorf Goodman. The timing wasn’t great. There was the disappearance of luxury competitor Barney’s, and the Saks business at best treaded water. Also, Neiman Marcus/Bergdorf Goodman was struggling to put a challenging Chapter 11 Bankruptcy proceeding behind it.

There was also the monetization of hbc.com and saks.com, which raised a considerable amount of money from a group of hapless investors. These investors did not realize how completely counterproductive this strategy would prove to be.

Along the way, Richard Baker has presided over a never-ending list of lead executives, many of whom barely lasted two years with the company. There was Tina Johnson, Jeff Sherman, Bonnie Brooks, Jerry Storch, and Helena Foulkes, among others. And then there was Marc Metrick, whose 30-year tenure with Saks has just come to an abrupt end. But maybe it was 30 years too long. Metrick was a planning executive at Saks who, in recent years, masqueraded as its lead merchant.

Debt Economics

The history of two weak and/or weakened retail companies merging and finding success is simply this: There is no history. Add to that the non-starter of two companies that essentially do business with the same customer and in many cases in the same geographic locations. But these hurdles didn’t stop Baker from consummating a debt-laden merger of two icons. And incomprehensibly, for well over a year, the company failed to pay many of Saks’ vendors either on time or in many cases at all. So, now both companies have just completed a poor 2025 in sales. And having been cut off from receiving fresh inventory by a cynical factor community, Saks Global just failed to make that $100 million year-end interest payment.

Baker in Bankruptcy

Maybe Baker will come up with a bundle of new cash. If business remains as poor as it has been, any new cash infusion would only be a stopgap measure. Alternatively, the company might come up with a prepackaged restructuring agreement with its creditors. Or it will surrender to a voluntary or involuntary bankruptcy proceeding.

I’m not a bankruptcy attorney, but having lived through Federated department store’s successful restructure, and an up close and personal experience with Bradlees stores eventual failed emergence from bankruptcy, I think the bell may soon toll for Saks Global.

If it files for Chapter 11 financial relief, creditors organize and line up based upon their preexisting credit agreements (or lack thereof). Secured creditors, typically the company’s lenders, rely on collateral rights while unsecured creditors, typically vendors and service providers, hope for some eventual relief through the bankruptcy process. All payables from the company, whether current or past due, are frozen.

In a bankruptcy, legal and financial restructuring professionals line up for a typically substantial fee opportunity. A new lender or a consortium of lenders emerges to provide Debtor in Possession funding to enable the company to stay upright while in bankruptcy. All vendors are asked to resume shipping based on the newly created surety of DIP financing.

But, lacking confidence that past due receivables will eventually be paid, many vendors resort to selling their company receivables to distressed debt (or vulture) investors for substantial discounted values. This, in my opinion, is a terrible flaw in the bankruptcy process in that unsecured vendors, who you would expect to have a stake in the company’s eventual successful emergence from bankruptcy, have now traded places with investors seeking a fast financial return.

Saks Global at Risk

If Sak’s Global were operating as a stable platform with a successful sales and margin track record, with capable senior leadership, a reliable operating strategy, and good relationships with its vendors and customers, there would be ample reason for the company to navigate through bankruptcy and emerge with new debt and a newly restructured balance sheet. But none of this appears to be the case. As 2026 unfolds to what will undoubtedly be a challenging year for all retailers, the prospects for Saks Global are truly grim. My sense is that many vendors long ago stopped shipping or have curtailed their support for Saks, Neiman Marcus and maybe even Bergdorf Goodman, and they are unlikely to get back on board after having been egregiously abused these past few years.

Many will find another retailer to serve their customers if they haven’t already done so or continue to build a direct-to-consumer model of their own. Why wouldn’t they? Who needs the sturm und drang of a failing retail partner who doesn’t pay its bills? If that happens, Saks Global is toast.

In contemplating my future after being laid off from EJ, relying on a small severance and my depleting savings, I can see how people do something to go to prison. They will have shelter, food, daily exercise, health insurance, no utility or car payments and, I can study for a degree - even a law degree - without incurring any debt. Maybe not a bad gig....I'll have PP and DC to thank for this opportunity!

https://techrights.org/n/2025/12/19/Microsoft_Over_120_Billion_Dollars_in_Debt_Prepares_Next_Round_.shtml

This is pure fraud and Trump needs to have Gary Cohen investigated!

I've been "out" for awhile now and while I do believe there's value in the brands...and there's a host of great, talented people there...it is, as it stands, a sinking ship and one not worth staying on. It will for sure get worse before it gets better...and "better" might mean just a little bit better not thriving. You have a leadership team at this point that is swamped by arrogance, short-term incentives and a lack of understanding of people, team, engagement and leadership...the things that actually will grow the company long-term.
Too much debt. Sacrificing too much to protect dividend. Macro pressures. Bad leaders. A strategy that probably would work but requires a focus that isn't there. Cutting the wrong people and teams at the wrong time.

This post deserves its own thread. Found at @q4+1kbdjtt9e.

I see posts on here all the time lamenting PE ownership, made without any understanding of how we got to this point, and how this goes all the way back to asinine decisions pre-bankruptcy in 2013. I’ve decided to play Cengage historian and lay some of this out for posterity, and so I can yell at the sky

2012–2013: Debt pile gets ugly
• Pre-bankruptcy: Before Chapter 11, Cengage was already doing financial engineering just to push out maturities — e.g., in 2012 it sold $725M of 11.5% senior secured notes due 2020 and amended its credit facilities to extend term loan and revolver maturities.
• July 2, 2013: Cengage files for Chapter 11 with about $5.8B of outstanding debt, announcing a “pre-arranged” restructuring to eliminate more than $4B of that.
Even before bankruptcy, they were in the classic LBO textbook-publisher trap: lots of high-coupon debt, some of it maturing in big lumps, and a business that’s not exactly a rocket ship.

2014: Emerges from Chapter 11… still leveraged
• April 1, 2014: Cengage officially emerges from Chapter 11. The plan cuts ~$4B of funded debt and brings in $1.75B of new Term Loan B financing, plus a $250M asset-based revolver, as exit financing.
• Post-reorg, they’re no longer at $5.8B of debt, but they do still have roughly ~$1.8–2B of funded debt sitting above a business doing around ~$2B of revenue at the time, still pretty leveraged.

That Term Loan B is key. By design, those loans usually have tiny quarterly amortization and then a big “bullet” (lump-sum) repayment at maturity. You drag a big principal balance for years, paying interest the whole time, then face a huge refinancing/repayment cliff at the end.

2014–2019: Term loan era, dividend recaps, and financial engineering
• In the years after emergence, Cengage spends a lot of time tweaking the capital structure: repricing the term loan, issuing additional term debt, and even doing share-repurchase and dividend recap transactions (they literally disclosed a “dividend recapitalization” in FY2015 current reports).
• if you’re still doing buybacks / dividends and refinancing loans rather than aggressively paying them down, you’re implicitly betting that refinancing the big bullet at the end of the term will be doable when you get there.
So by late 2010s you’ve got a company that did cut its original $5.8B anchor, but is still sitting on a large secured term loan and reliant on capital markets to roll that over when maturities and balloon payments come due.

2019–2020: Aborted McGraw-Hill merger, more uncertainty
• In 2019 Cengage announces a planned merger with McGraw-Hill and a related amendment to its senior secured credit facilities, again, capital structure is clearly front-and-center.
• The merger is ultimately called off in 2020 after regulatory issues, which leaves Cengage still independent, still carrying its own debt stack, and now without the scale/merger synergies that were supposed to help.
So by early 2020s, you’ve got: meaningful secured debt, a term-loan structure with big future maturities, and no merger “escape hatch.”

2021–2022: Rising rates + debt drag
• For FY22 (year ended March 31, 2022), Cengage reports adjusted cash revenue of about $1.37B and Adjusted Cash EBITDA less prepub of ~$326M.
• That’s a decent EBITDA number, but on top of a large term loan it still implies a non-trivial leverage ratio. As global rates move up and credit spreads widen (2022–2023), the cost of keeping that debt financed goes up, and the risk of refinancing a big bullet at attractive rates gets worse.
The company itself starts talking more about “financial flexibility” and de-leveraging in investor materials around this time… they know the balance sheet is constraining what they can do.

April 2023: Apollo preferred equity to prevent collapse
• April 17, 2023: Cengage announces that Apollo Funds will invest $500M into a new series of convertible preferred stock
• In the press release, Cengage explicitly says it will use the proceeds to “reduce outstanding debt and lower interest expense,” and to “increase financial flexibility” to invest in growth.
The old LBO-style debt and its balloon risk were getting harder and more expensive to carry in a higher-rate world. Rather than wait for a ugly refinancing fight when the big maturities hit, they sold a chunk of the company to Apollo via preferred equity, then used that cash to pay down loans and push the maturity wall further out.

2023–2025: PE priorities, “efficiency,” and repeated layoffs
Once Apollo is in, the priorities shift to the usual PE playbook:
• Sharpen the focus on EBITDA, cash flow and “portfolio mix
• Cuts, cuts, cuts

A classic pattern of a ZombieCo:

1. Heavy term-loan/balloon-style post-bankruptcy debt +
2. Rising interest rates and a tougher refi environment
3. Need to de-risk the maturity wall with Apollo preferred equity
4. Apollo-style mandate to improve profitability and reallocate capital
5. Repeated restructuring and headcount reductions

After years of foisting your su-kage onto SH&A, you are taking the golden parachute in a testament to the clear lack of leadership ability and lack of qualifications you brought to a once mighty division, leaving the group wallowing in debt to the tune of almost $800,000,000 to Blackstone, no clear goals and a culture of pettiness and obsequiousness.

Thanks for the memories and the sh---y raises.

By America Hernandez and Stephanie Kelly
October 7, 2025

SUMMARY

• Current payouts unsustainable with oil below $80 a barrel

• Crude oil prices expected to continue falling

• Companies under pressure to cut debt

• Reduced buybacks and job cuts announced

PARIS/LONDON, Oct 7 - The five biggest global oil majors are moving to cut costs, jobs and share buybacks as falling oil prices threaten to make shareholder payouts unsustainable without increasing debt, analysts said.

Chevron (CVX.N), ExxonMobil (XOM.N), BP (BP.L), Shell (SHEL.L), and TotalEnergies (TTEF.PA), have pledged high returns for the past decade to avert an investor exodus as fossil fuels lost their appeal.

But maintaining those generous payouts, which have topped $100 million annually since 2022, has increasingly been funded by debt as energy prices retreated from highs caused by sanctions and supply disruptions in the wake of Russia's invasion of Ukraine.

https://www.reuters.com/business/energy/oil-price-fall-turns-up-heat-big-oils-bloated-payouts-2025-10-07/

The company is piling new debt on top of old debt again borrowing money to refinance what it is already refinanced block of debt.

Pull a block. Add a block. Raul smiling like all good. Until the market sneezes at the shaky debt tower. or it collapses under ongoing client exodus resulting in cashflow shortfall.

• Oracle’s credit risk gauge on its debt closed at the highest level since 2009
• A surge in bond issuance from large tech companies helped trigger the move
• Investors are increasingly worried that the AI sector may be forming a bubble
• The cost of protecting Oracle’s debt against default rose to about 1.28 % a year
• This level is based on end of day credit derivative prices in New York
• It marks the highest cost of protection on Oracle’s debt since March 2009
• The price jumped nearly 0.03 % compared with the prior trading day
• The gauge has more than tripled from around 0.36 % in June
• Heavy funding activity by tech firms is adding pressure to credit markets
• Oracle is being viewed as more exposed to AI related volatility in investor sentiment
• The move fits into a broader rise in perceived credit stress for major tech issuers
• These shifts are intensifying doubts about how sustainable the AI driven expansion will be

https://www.bloomberg.com/news/articles/2025-12-02/oracle-credit-fear-gauge-hits-highest-since-2009-on-ai-bubble-fears

SB, aka Bandy, closed the last Town Hall with a sort of “Trust me, bro” line.

Fitting, because that’s basically the financial strategy right now: trust us while we borrow new money to pay old debt and hope nobody asks why the interest bill keeps climbing.

Xerox isn’t running a literal Ponzi scheme, but the behavior rhymes: fresh debt replaces maturing debt, each round more expensive than the last, with no cash flow to reduce anything on its own.

Let's not forget some of SB's “stellar” performances in this Ponzi-like scheme:

• In September 2023, SB borrowed $500M to buy back from his lord and master Carl Icahn (a legendary activist investor who had fallen on hard times and was wrong not by decimal points but by several orders of magnitude in his calculations to buy HP) his stake in Xerox;

• In late 2024, SB borrowed another $220M to buy ITSavvy, the company then and nowadays run by a friend of the now-departed COO John B (still a board member though);

(Meanwhile, days later, SB indulged the whims of the also now-departed Chief Disruption Officer and wasted $10-20M on sponsoring the Aston Martin Aramco Formula 1 team, which wouldn't even win a Hot Wheels toy car race)

• And even though 2024 wasn't over yet, SB had time to plan how to borrow more money to acquire (well, rather than “acquire”, I would say “pay to be managed by”) Lexmark: close to $1B of extra liabilities for a company that lost about $740M last year.

SB & Friends claim they’ll pull out $200–300M in “synergies” by cutting overlapping functions, closing facilities, and shrinking corporate overhead.

Without those savings, the debt load gets heavier, interest expense keeps rising, and refinancing becomes harder. It’s that simple.

SB & Friends keep repeating the synergy story like it’s guaranteed.

It isn’t.

It requires flawless execution, discipline, and no surprises—things they know very little about.

Meanwhile, the core business is falling off a cliff. The only thing keeping this train moving is access to credit markets and the hope that lenders keep buying the story.

So yes: when the CEO says “Trust me, bro”, what he’s really saying is: “You are going to take a leap of faith and BELIEVE that the cuts will be implemented quickly, revenues will stop declining, and lenders will continue to be friendly”.

Except the lenders are not staying friendly anymore. S&P Global Ratings just cut Xerox’s credit rating to CCC+.

For those unfamiliar with S&P credit ratings: on a scale of 22, with 1 being “Prime” and 22 being “Lousy” (default, no money to pay bills anymore), CCC+ is 18.

S&P are also warning Xerox will burn $170–200M in cash this year and carry a debt load more than 7.5 times our earnings.

Put it in the simplest terms possible: the rating agency thinks we’re borrowing money just to stay alive, and that if anything goes wrong — if synergies slip, if revenue drops, if refinancing gets delayed — the whole structure can fall apart faster than any PowerPoint slide can explain.

At this point, the person who says "Trust me, bro" is in fact the last person you should trust.