As Sears heads for Chapter 11, Lampert wants to win no matter what happens

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According to a Wall Street Journal report, Sears hired advisers to prepare the filing of a chapter 11 bankruptcy. However, its chief executive, Edward Lampert, would like to know if Sears can restructure its debt while avoiding the deposit. Apparently, he does not want to run the risk of being placed in a court-ordered Chapter 7 filing, which would require the liquidation of all of the entity's assets.

It's difficult to feel even a minimum of sympathy for the CEO of

Sears Holdings
. For most observers, he removed the meat from Sears' bones and dried them into a dried beef that his ESL holding company gnawed periodically. He has sold assets to the same holdings of ESL, has taken over real estate from most of the stores for which he receives rent through Seritage (another of his companies) and has managed to make him the main creditor of the society. It's a nightmare of American retailers that seems to have no end in sight.

But the East more money in sight for ESL, whatever happens.

Let's go back a bit. Chapter 11 bankruptcy filings were originally intended to give a distressed firm a chance to breathe as it reorganized itself from a struggling debt-laden company to a leaner, leaner company. who could pay his debts over time. To quote the US courts:

This chapter of the Bankruptcy Code generally provides for reorganization, generally involving a corporation or a partnership. A Chapter 11 debtor generally offers a reorganization plan to maintain its business and pay creditors over time.

This sounds good in principle and would give an honest and determined management team the opportunity to do things right. But the devil is in the details, and chapter 11 has become a real feast of fees for everyone involved. In fact, even if the company switches from Chapter 11 to Chapter 7 (liquidation), bankers, lawyers, liquidators and the few people or entities that manage what is euphemistically called. "

And then, let the frenzy of expenses begin!

None of this has anything to do with retail by itself; everything is a question of fees. And there will be fees galore.

But that leaves us with a lot of questions in the case of Sears.

The biggest creditor is also the CEO. Edward Scott Lampert is the Chief Executive Officer of ESL Holdings (which is what ESL is an abbreviation for). He is also the CEO of Sears Holdings Corporation. In any rational world, Lampert would be the first man to step out of the door, to steer the company to the ground. In today's world, he will be the type to pick bones and close doors.

This job destruction exercise made Lampert even richer. And he's not finished yet. In the world of bankruptcy, the most important creditors eventually become the owners of the new entity – or, as they said in the summer camps, "Second verse, as the first … a little stronger and a little worse.

Lampert has also sold most of the company's most interesting assets. Originally interested in real estate, he discovered that some of the company's most iconic brands were of value: Craftsman Tools (I liked it!), Lands End and Sears Canada. And since August, there is talk of selling another jewel in the crown, Kenmore.

But as CNN Money wrote in August, Kenmore was no longer what it was: "It's the equivalent of a flip phone in the age of smartphones," Sean Maharaj told the website, director of retail sales at AArete.

So that's where the meat is gone.

Let's take a look at the wide range of taxes that will be prepared as part of a Chapter 11 filing. Who is invited to the party?

• Assuming that the Chapter 11 filing occurs, the bank offering Debtor-Operator (DIP) financing is a combination of fees and interest. That's why the bank that provides the DIP money is often the bank that called the default
• The lawyers are in the mix – for both the creditors and the estate. They all make a lot of money. Lampert has added a restructuring board, Alan Carr, to Sears' board of directors, and the law firm Carr has every interest in making a lot of money through filing, reorganization or liquidation.
• All these "advisers" hired by Lampert will bring in a lot of money. Expensive money.
• Given the fact that ESL is the main creditor, it seems that Lampert speaks a lot in the mirror and then imputes his time to the estate.
• Speaking of liquidation, the liquidators of goods tend to get away with the "sale in bankruptcy". Most consumers do not realize that prices tend to be equal to or higher than those you bought. can get to any other retailer. I have worked with a lot. It's a good deal, as you sell everything literally to the walls. The calculations are rather sophisticated and the liquidators are doing pretty well.

Even after the end of liquidation sales, the negotiations continue. And every conversation is billable.

Four years ago, we were already under Sears death watch. I was shocked when I read the date of this piece that I had written for Forbes at the time. So long ago RadioShack still existed! And despite all the evidence of mismanagement and exposure to the company, Lampert actually blamed the media for his problems in 2017. I've also taken up this story.

All this raises the question: are we at the last pitiful massacre of this once legendary American institution? It seems that if Lampert succeeds, the answer is no. Some think that a viable business can be created from the smaller stores of the company. And then there is also this treat of the WSJ:

But Lampert argues for a broader restructuring that would include reducing Sears debt by $ 5.5 billion by more than $ 1 billion, selling $ 1.5 billion worth of real estate and the disposal of assets of $ 1.75 billion, including the Kenmore appliance brand, which he offered to $ 400 million. millions to buy.

In other words, you will have more meat to consume, as well as the fees we expect from ESL and Seritage (the real estate division of Lampert).

I sympathize with the thousands of Sears employees who have been unemployed and are also going to see their pension funds disappear. Something must cover those costs, after all. My sympathies also go to the shopping centers that depended on Sears as a viable anchor store. Vacancies in shopping centers are increasing, and I can only blame it for the failure of stores like Sears.

No matter how I see it, it's an American tragedy. It is the story of greed that wins all the strengths of the market. In fact, we could say that the actions of Lampert destroyed the market of Sears Holdings.

Yes, there were problems with the size and strategy of the store. Yes, the company had always tried to succeed in the garment industry, where it had no real reason to exist. But there are lives that have been, are, and will be affected by these movements. Real lives. From our middle class in regression.

Frankly, every time I walk past the private island where Lampert's Miami home is, I feel vaguely sick in my stomach – Miami's most exclusive real estate, bought and paid for by the company and employees that a CEO is supposed to support and protect. It's really an American tragedy. And no amount of dried deli meat will make me feel better about it.

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According to a Wall Street Journal report, Sears hired advisers to prepare the filing of a chapter 11 bankruptcy. However, its chief executive, Edward Lampert, would like to know if Sears can restructure its debt while avoiding the deposit. Apparently, he does not want to run the risk of being placed in a court-ordered Chapter 7 filing, which would require the liquidation of all of the entity's assets.

It's difficult to feel even a minimum of sympathy for the CEO of

Sears Holdings
. For most observers, he removed the meat from Sears' bones and dried them into a dried beef that his ESL holding company gnawed periodically. He has sold assets to the same holdings of ESL, has taken over real estate from most of the stores for which he receives rent through Seritage (another of his companies) and has managed to make him the main creditor of the society. It's a nightmare of American retail that does not seem to have an end in sight.

But the East more money in sight for ESL, whatever happens.

Let's go back a bit. Chapter 11 bankruptcy filings were originally intended to give a distressed firm a chance to breathe as it reorganized itself from a struggling debt-laden company to a leaner, leaner company. who could pay his debts over time. To quote the US courts:

This chapter of the Bankruptcy Code generally provides for reorganization, generally involving a corporation or a partnership. A Chapter 11 debtor generally offers a reorganization plan to maintain its business and pay creditors over time.

This sounds good in principle and would give an honest and determined management team the opportunity to do things right. But the devil is in the details, and chapter 11 has become a real feast of fees for everyone involved. In fact, even if the company switches from Chapter 11 to Chapter 7 (liquidation), bankers, lawyers, liquidators and the few people or entities that manage what is euphemistically called. "

And then, let the frenzy of expenses begin!

None of this has anything to do with retail by itself; everything is a question of fees. And there will be fees galore.

But that leaves us with a lot of questions in the case of Sears.

The biggest creditor is also the CEO. Edward Scott Lampert is the Chief Executive Officer of ESL Holdings (which is what ESL is an abbreviation for). He is also the CEO of Sears Holdings Corporation. In any rational world, Lampert would be the first man to step out of the door, to steer the company to the ground. In today's world, he will be the type to pick bones and close doors.

This job destruction exercise made Lampert even richer. And he's not finished yet. In the world of bankruptcy, the most important creditors eventually become the owners of the new entity – or, as they said in the summer camps, "Second verse, as the first … a little stronger and a little worse.

Lampert has also sold most of the company's most interesting assets. Originally interested in real estate, he discovered that some of the company's most iconic brands were of value: Craftsman Tools (I liked it!), Lands End and Sears Canada. And since August, there is talk of selling another jewel in the crown, Kenmore.

But as CNN Money wrote in August, Kenmore was no longer what it was: "It's the equivalent of a flip phone in the age of smartphones," Sean Maharaj told the website, director of retail sales at AArete.

So that's where the meat is gone.

Let's take a look at the wide range of taxes that will be prepared as part of a Chapter 11 filing. Who is invited to the party?

• Assuming that the Chapter 11 filing occurs, the bank offering Debtor-Operator (DIP) financing is a combination of fees and interest. That's why the bank that provides the DIP money is often the bank that called the default
• The lawyers are in the mix – for both the creditors and the estate. They all make a lot of money. Lampert has added a restructuring board, Alan Carr, to Sears' board of directors, and the law firm Carr has every interest in making a lot of money through filing, reorganization or liquidation.
• All these "advisers" hired by Lampert will bring in a lot of money. Expensive money.
• Given the fact that ESL is the main creditor, it seems that Lampert speaks a lot in the mirror and then imputes his time to the estate.
• Speaking of liquidation, the liquidators of goods tend to get away with the "sale in bankruptcy". Most consumers do not realize that prices tend to be equal to or higher than those you bought. can get to any other retailer. I have worked with a lot. It's a good deal, as you sell everything literally to the walls. The calculations are rather sophisticated and the liquidators are doing pretty well.

Even after the end of liquidation sales, the negotiations continue. And every conversation is billable.

Four years ago, we were already under Sears death watch. I was shocked when I read the date of this piece that I had written for Forbes at the time. So long ago RadioShack still existed! And despite all the evidence of mismanagement and exposure to the company, Lampert actually blamed the media for his problems in 2017. I've also taken up this story.

All this raises the question: are we at the last pitiful massacre of this once legendary American institution? It seems that if Lampert succeeds, the answer is no. Some think that a viable business can be created from the smaller stores of the company. And then there is also this treat of the WSJ:

But Lampert argues for a broader restructuring that would include reducing Sears debt by $ 5.5 billion by more than $ 1 billion, selling $ 1.5 billion worth of real estate and the disposal of assets of $ 1.75 billion, including the Kenmore appliance brand, which he offered to $ 400 million. millions to buy.

In other words, you will have more meat to consume, as well as the fees we expect from ESL and Seritage (the real estate division of Lampert).

I sympathize with the thousands of Sears employees who have been unemployed and are also going to see their pension funds disappear. Something must cover those costs, after all. My sympathies also go to the shopping centers that depended on Sears as a viable anchor store. Vacancies in shopping centers are increasing, and I can only blame it for the failure of stores like Sears.

No matter how I see it, it's an American tragedy. It is the story of greed that wins all the strengths of the market. In fact, we could say that the actions of Lampert destroyed the market of Sears Holdings.

Yes, there were problems with the size and strategy of the store. Yes, the company had always tried to succeed in the garment industry, where it had no real reason to exist. But there are lives that have been, are, and will be affected by these movements. Real lives. From our middle class in regression.

Frankly, every time I walk past the private island where Lampert's Miami home is, I feel vaguely sick in my stomach – Miami's most exclusive real estate, bought and paid for by the company and employees that a CEO is supposed to support and protect. It's really an American tragedy. And no amount of dried deli meat will make me feel better about it.