Thread regarding Sears layoffs

The Stanley lawsuit was settled already. As far as I know the outcome is he can’t use “the original home of craftsman” as a marketing slogan. He really didn’t even have to go there, had he just advertised Sears is cheaper than Lowe’s for Craftsman because Stanley is paying the licensing. All he had to do was advertise they couldn’t beat the Sears pricing, but as I say later he isn’t a retailer.

Eddie settled with many vendors at the time of the purchase agreement deciding it was more advantageous to continue shipping to Sears since they had new lines of credit to continue the revenue stream. The holdouts are the ones still there in court. There will not be anything left to go around. $50 million and a few leases isn’t going to pay all the bills. Most of these places won’t bother trying to sue Eddie because they won’t recoup enough after legal expenses. Will some? Sure. But it only impacts Eddie directly. Eddie wasn’t stupid either, he tried to do everything by what is technically legal. Should it be? Probably not. However when it comes to the court system it’s going to come down to what is actually legal and he will have a pretty good case in that regard in many matters. He isn’t stupid in financial matters he’s just not a retailer.

The transform and sears disagreements are over asset transfers. Last I heard SHLD was still withholding a Florida lease from Eddie.

None of this impacts the current stores other than the involved vendors probably won’t do business with Eddie. Many of them are smaller vendors or foreign vendors who probably don’t understand they’re going to get nothing out of this.

It matters not if the companies are separate at this point. It makes Eddie look like a f—ing id–t, screwing over not just ONE company but TWO at the same time.

Sears Holdings and Transformco are two separate companies. However, Eddie Lampert, as the ex-CEO of Sears Holdings, still has financial and legal ties to "old Sears." Lampert is still fighting Sears Holdings over the Asset Purchase Agreement (APA.) That has not been settled. Also, Sears Holdings is suing Eddie Lampert for allegedly taking valuable assets from Sears Holdings and transferring it to his own companies. And Lampert is suing Sears Holdings for breach of contract regarding the Asset Purchase Agreement.

This scenario could happen:

Judge Robert Drain converts Sears Holdings from Chapter 11 to Chapter 7. A trustee is appointed to oversee liquidation of Sears Holdings. Sears vendors receive whatever is left in the old estate. They may not get much to satisfy their invoices. They exit out of Chapter 7 and sue Eddie Lampert since he was the one who filed for bankruptcy. The vendors can go after the individual, not his company, Transformco. Lampert is already facing a lawsuit from Stanley, Black and Decker over statements made about "the original home" of Craftsmen. Google it and read the lawsuit.

Community Unit School District is suing Hoffman Estates over breach of contract. Below is an excerpt from the court document, case number 12683.

"(the “Circuit Court”), in a matter styled Community Unit School District 300 v. Village of Hoffman Estates, et al., Case No. 2018 CH 12683 (the “Illinois Action”), seeking declaratory, injunctive and other relief arising from SHC’s alleged failure to comply with certain terms and conditions of the Economic Development Area and Tax Increment Allocation Act, 20 ILCS 620/1 et seq. (the “EDA Act”) and an economic development agreement entered into by and between the Village and Sears, Roebuck and Co., as the developer (“Sears”) (the “EDA Agreement”) under to the EDA Act, pursuant to which the developer (as set forth in the EDA Act) receives annual distributions from the Village’s special tax allocation fund maintained under the EDA Act (the “Special Tax Allocation Fund” and the funds therein, the “EDA Funds”). WHEREAS, at the time the School District filed the Illinois Action, the Village was holding EDA Funds consisting of property taxes levied for tax year 2017 that were extended and collected in calendar year 2018 in the Special Tax Allocation Fund (the “2017 EDA Funds”), which 2017 EDA Funds — if Sears was compliant with the relevant terms and conditions of the EDA Act and EDA Agreement — were projected to be distributed fifty-five percent (55%) to Sears (the “55% Portion”), and forty-five percent (45%) to various taxing districts within the State of Illinois (the “45% Portion”) pursuant to the EDA Act and EDA Agreement. WHEREAS, on October 15, 2018, the Debtors filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), staying the Illinois Action pursuant to section 362 of the Bankruptcy Code.

Pepperidge Farm, Incorporated says Sears Holdings owes them $29,233.71, according to court documents. The commercial bakery company listed its invoices from Sept. 25, 2018 to October 2018.

This company is one of multiple vendors who never received payments from merchandise shipped to stores last year.

As you can see, this bankruptcy case is complexed. There are multiple plaintiffs involved in this case.

Judge Drain could end it all with Chapter 7.

The bankruptcy trustee doesn't own anything. Sears Holdings and Transform own the whole pie that' the vendors, creditors, and lawyers are fighting over, as well as everything that Eddie siphoned off to Lands End, Seritage, ESL, etc over the years. Whatever corpus exists in Sears Holdings is still in Eddie's pocket, because he still owns it, just like he owns Transform. As majority owner, he could still kick off the board if he wanted, just like he kicked out the board of SHOS when they didn't do what he wanted to do. It's all a puppet show designed to pretend like Sears isn't doing his bidding for the SEC's and Judge Drain's benefit. Look! See! No conflict of interest! He put on the same dog and pony show with Sears Canada, but SHOS showed that it's all BS. The owner is the owner is the owner, and controls the board.

To the person who said Eddie owns/controls old Sears, he doesn't. The court took that over in bankruptcy. That's why he had to buy the stores back.

Reading the various articles, like this one, they sometimes refer to Sears Holdings and other times, just Sears. Even in the same article. It NEVER clarifies the differences. Even this articles, which is about Sears Holdings, toward the end says Transformco bought Sears out of bankruptcy. Not clear enough and can make people think that even after Transformco bought Sears, it is going to liquidate.
I won't argue that liquidation of the stores is probably the end result, just not directly due to this Chapter 11 vs. Chapter 7 discussion.
I personally feel that Eddie knew all along the BK was going to come and his attorneys and experts had it all laid out. That's why we probably don't see many worthwhile lawsuits against him or ESL directly. Jeez. He got a massive loan from Warren Buffett very recently. Doubt that was done blindly by the Oracle of Omaha. These people know what they are doing. Its all laid out.

By no means does it make proper what they did to the Sears and Kmart institutions, its customers and primarily Associates both current and retired. Stinks to high heaven. But it was not a concern. Simple as that.

Truthfully I don’t understand all the drama surrounding conversion to Chapter 7. To my knowledge since the asset purchase agreement it became a liquidating Chapter 11 case for SHC. There isn’t anything left of SHC to reorganize! If it moves to Chapter 7 it just means SHC won’t have the control over liquidation it currently has nor will the creditors be able to argue back and forth. The trustee will move things along more expeditiously... Heck it might be a nice change of pace now that I think about it!

Old Sears, not new Sears. These reporters don’t understand the bankruptcy process.

Old Seats New Sears, doesn't matter it's run by the same sh–etasic leaders. And it only shows how sad 5h9ngs have become that the media can't tell the difference between the two, because really it's the same company on the inside.

You guys don't understand how this works. Sears Holdings is the old company – it still holds some assets, but not the stores. The stores were sold to a new company (technically and legally). This has NO impact on Transformco. These fake news journalists have no idea what they are reporting on...it's sad and unprofessional.

Hearing on Chapter 7 motion hasn't been moved up. There are only 2 issues on docket today. The plan confirmation & the motion regarding modifications to retire benefits... But yes, considering all the controversy over the plan it could take awhile!

@dhh LOL as if they even have 425 stores anymore

Hearings for precisely this issue were scheduled to be heard on Oct 23rd; but it has been moved up to today .. Oct 3rd! This is likely to be a multi-day session. In part this is a Chapter 11 confirmation .. likely to fail. MANY vendors have join in objections SPECIFICALLY asking the case be converted into Chapter 7 ASAP.

Whether in Chapter 7 or Chapter 11... old Sears is in full liquidation mode; even if confirmed under Chapter 11.

@11lLzEaS-mlg As they should.

No, this is Sears Holdings, definitely old Sears. That does bring up an interesting hypothetical though. A large group of vendors who are going unpaid could theoretically force Transform into involuntary bankruptcy.

@11lLzEaS-dhh But Transformco owns the old company now and owes the debt as well.

I'm reading a similar article this morning which states that conversion to Chapter 7 "would effectively spell the end of the once-dominant retail giant, forcing it to halt operations at 425 stores and result in the loss of 45,000 jobs.". TransformCo's own issues aside, can the court seriously liquidate assets (stores) that don't belong to SHC anymore? They sold the stores!!

And this isn't the whole "Oh it is the old Sears" nonsense people say. This is the new Sears that these vendors want blood.