They signed the divorce papers half a decade ago, but Transform, Sears, Seritage, Kmart, ESL, all of it still live under the same house of Eddie Lampert Inc. Seritage's problem is that while it's busy trying to kick out Sears and Kmarts as fast as tenants come in, it costs a metric butt-ton of capital (read money) to turn these spaces into something companies will actually use. This is called "investment", but it's really functionally operating expenses way overdue, because Eddie has taken such sh–ty care of these properties for decades that they all need enormous amounts of money just to bring them back up to snuff.
In order to meet these cash needs, Sears and Kmart continue to exist, Seritage s—ing the dessicated corpse dry, every last bit of EBITDA going to feed the Seritage maw. Seritage itself took out a $1.6B loan from Berkshire at predatory loan rates, with all sorts of covenants about liquidity and revenue, covenants it didn't meet, and it's been forced to cancel its dividend, get interest rate deferments, while TransformCo has been forced to take out even more loans and sell every last hard and IP asset it has to the tune of hundreds of millions to keep the farce of Sears and Kmart going. Berkshire effectively owns Seritage now, it just hasn't foreclosed on it yet, waiting for Eddie to be bled to the maximum first.
This means that Seritage needs to lease these out at well above market rates to break even to make up for the enormous capital costs, and that was before COVID-19. Seritage was not getting these rates, there are so trampoline parks, gyms, and Big Lots to go around, and these tenants are disappearing at lightning speed in the post-virus economy. Lessees are breaking their leases. Buyers are backing off.
Where the rubber meets the road is SNOs, that is, signed but not leased. Seritage had nearly 500 of these pre-COVID-19, inked but not ready to move in. And now Seritage doesn't have any rent money coming from its many bankrupt and non-paying tenants, the buyers who have backed off, and definitely not Sears. That means it doesn't have the operating cash flow to develop their properties to usable properties so tenants can move in, many projects which have been delayed indefinitely. These tenants are hopping mad and are bringing the lawsuits. Eddie is out of capital, and is facing foreclosure and lawsuits on every front.
Every creditor, vendor, supplier, of anything Eddie, whether it's to Kmart, Sears, TransformCo, Lands End, Seritage, or others needs to push for Chapter 7 liquidation if they don't want all the money to end up in the hands of lawyers and Eddie's pockets. The invoices are piling up in arrears, and Eddie is busy trying to turn assets into personal offshore cash at best possible speed.