Thread regarding Sears layoffs

1. The REMIC properties securing the pension fund are grossly overvalued based on real market comp price. (There are too many vacant department stores in too many B & C malls now and more are on the way. Supply is outstripping demand)

2. The PBGC agreement doesn't require full funding only partial (85%)

3. Just because the Property is Bankruptcy Remote, it doesn't mean Sears store operations are. (in fact they are not)

4. in Summary, the properties used to guarantee the pensions are probably worth 50% to 70% of their stated value to PBGC. That fatal mistake along with the 85% coverage ratio in the PGBC agreement, means the pension fund is grossly underfunded now and will get worse in the future however long or short that may be.

Here's the article referenced: https://seekingalpha.com/article/4043569-sears-holdings-history-selling-top-locations

It doesn't include a full list of the REMIC stores, only some of them.

I dug up the whole list in this massive SEC filing from March 2016: https://www.sec.gov/Archives/edgar/data/1310067/000119312516516958/d143938dex101.htm

It's "Exhibit 7" if you want to ctrl-F for it on that page. I tried to paste it here but it was too long for this forum to let me post it.

Another relevant Seeking Alpha article (if you want to look at it yourself, you'll probably have to either open this one in an incognito/private window or clear your cookies if you already clicked on the previous article, they don't let you view very much at a time): https://seekingalpha.com/article/3965220-red-flags-sears-pensioners

It summarizes the intent of the REMIC setup as: "The Pension Benefit Guaranty Corporation ("PBGC") entered into a five-year pension plan protection agreement with Sears. The idea was to create a security interest in the REMIC issued securities and the associated properties in the event that Sears went bankruptcy. The REMIC properties along with the interest in the KCD notes could be used to satisfy the pension liabilities of Sears' pension fund."

It also points out that one of the Georgia stores on the list when this REMIC setup was established in 2016 had already been closed since 2010. As long as Sears still owns the empty abandoned building, they apparently could still put it up for collateral/protection/whatever alongside the still-open store locations.

And it includes screenshots of the "Exhibit 7" REMIC list.

Two tiers of active pensioners are either being paid or slated to be paid via annuity from Met Life by November 1 2017 . This affects roughly 71000 retirees. Over I billion dollars of annuities have been purchased.

Where the shortfall may lie is with future retirees, and those with higher monthly pension payments. Those are still tied to the original pension plan.

@eaf, if you looked at the list. 90-95% of the stores are in B or C malls.

Some stores on the list are even closed permentally

The pension insurance fund attached these assets as property they will assume if Sears does not fund the pension adequately. they would be sold off and proceeds used to help fund the pension shortfall

I found the list online in an article by seeking alpha titled Sears holdings: a history of selling its top locations. My store was listed as a REMIC property. I also found a document under searsholdings.com called Sears Reinsurance and Securitazation Transactions that wrote about the REMIC properties. And before some smart a-- comes on here and tells me i have to much time on my hand, I DONT, it took 2 minutes to find this.

How do you tell if your store is one of the 162 properties??

I think when bk does happen everything will be sold anyway to pay creditors, which it seems Fast Eddie will have a huge payday with all the loans he has dished out which are coming due in 2018.

I hope he has not figured out a way to screw people out of their pensions.

It just means the properties would be owned by the pension fund in the case of bK. They would be sold and the proceeds go to the pension find. There not bankruptcy proof.