Sears Holdings ( Old Sears ) is administrative insolvent and about to run out of money.
Brought to you by the same people Eddie hired/brought over to run Transform Holdco ( New Sears)
https://seekingalpha.com/article/4254161-sears-bankruptcy-chaos
14 replies (most recent on top)
@YxHdDb6-1fpp In other words, Fast Eddie pulled a Fast Eddie, got the company under his control for peanuts and letting the "old" company die and the "new" company basically have as his own personal piggy bank in which he will most likely run into the ground and bankrupt it before too long.
There shouldn’t be anything confusing about this. This really means absolutely nothing to pretty much everyone here. It won’t impact business whatsoever,
Eddie did a bid which bought all the valuable assets of Sears Holdings. This is now Transform which is the stores.
The Sears in bankruptcy court is old sears. They’re basically bickering about which debt holders are going to get what money from the debtor in position fund, some paltry payout Eddie gave to avoid certain claims and money from the stores they closed during bankruptcy which appears to have been totally wasted on the bankruptcy case itself during the period it took for Eddie’s sale to close.
Eddie is fighting to keep some $50 million in cash that was basically the day to day cash in the register tills company wide because he claims they lied to him about $60 million in inventory they didn’t have.
The largest debtors area Eddie and that Cyrus place that his friend owns that was doing those controversial default gambles.
Basically depending on how the debt is ultimately paid if there is any money left Eddie and his buddy might get some cash. Instead of lower claims. There may be no money left the lawyers might get it all.
None of this means a thing to pretty much everyone. Eddie paid the largest vendors in his bid.
oldsears will probably Chapter 7, or they won’t file a reorg plan because they really have nothing left to reorganize
This concerns Old Sears. not New Sears,
So does this potentially mean total liquidation and no stores for Eddie?
What will Oldco liquidate ? They sold everything to ESL and Oldco is now Tranformholdco. This is getting too complicated and confusing.
Oldco would Chapter 7, it’s largely meaningless unless you’re an unsecured creditor.
@YxHdDb6-1rdm Wait, Chapter 7 for the original company or this "new" company?
Chapter 7 next week possibly for Sears. Get ready to liquidate whatever is left of oldco.
Eddie is just putting on a show here. The case will likely either convert or be liquidated but oldco has no assets to liquidate any money Eddie doesn’t get is going to lawyers if this drags out even further. There can be no exit plan when OldSears has nothing to reorganize. It’s literally a dead shell of debt with potentially some reserve cash.
All Eddie probably wants to do is keep that operating cash from when he took over.
Transform isn’t paying for anything other than a few of Eddie’s lawyers to see if he can get a few more bucks out of everyone. The DIP was kind of small to begin with, I supposed it was speculation it would liquidate but Eddie has friends, collateral and such to put forth so he did his debt leveraged takeover and set up all the credit facilities only for the go forward plan.
Eddie took everyone for a ride and now it’s private and no one will know what happens. If he gets hometown watch out because he will downsize big stores into hometowns.
News Flash... Eddie Lampert becomes first person in recorded history to successfully sue himself...
transform hold co paying with another companies bank accounts because no plan was penned or ready( sears holdings) when those accounts are in the red and cant even pay admin--433 million in loss showing on EBITA, where is it coming from? ESL now wants the plan from Eddie when he is the one putting the plan together and owns ESL? someone is trying to separate themselves from miss doings everywhere
What is humorous is how ESL reportedly wants copies of plans too, like they are entilted (being the largest debt holder). They make it sound like (old) Sears is out of control during the bankruptcy. It probably is. But Eddie was CEO and Chairman of this company before October. He didn't know what he was doing????
Of course we know the truth. He engineered all of this.
It is much more dire than that article indicates. Sears has been paying administrative fees and operating expenses with funds not allotted for that purpose. After Feb 18th (Old) Sears will be restricted from using cash that isn't requested and budgeted from anything other than the wind-down account; which has not been used to-date. Many fees already paid to lawyers and advisers will be reduced from the wind-down account; since they were improperly paid from other funds. There may be nothing left in the wind down account.
No DIP funds remain. (Old) Sears has no remaining assets. NONE. No Inventory. No real estate, No stores. Not even GOB inventory.
I expected Sears stock to be cancelled in April; which still may be the case; despite the prime clerk having already set some hearings for May. There simply may not be sufficient funds to continue the bankruptcy process past April.
Paychecks are still arriving. It’s just the debt holders on lower tiers that weren’t Eddie aren’t going to be paid. He got the company so he got what he wanted.