Thread regarding Sears layoffs

Subsidiaries of a holding company can own securities issued by other subs in the same company. Sears RE is a separate company from Sears retail, but it is not separate from Sears Holdings. The 125 stores are counted in the consolidated balance sheet of Sears Holdings. In any case, all this doesn't matter much for employees, unless they bought into the "hidden $20b" nonsense and bought stock

Ha Ha. First of all, it says it has issued securities, which means it is separate from SHLD. Second, it is based in Bermuda. Hmm, I am sure Eddie finds Bermuda's laws to be in the better interest of SHLD shareholders. It defines bankruptcy remote as saying that the only way the assets can be seized is if the properties in the subsidiary are what caused the bankruptcy. And third, the damn report hasn't even been updated in two and a half years.

Sears own statement about the reinsurance and securization transactions can be found here.

https://searsholdings.com/docs/investor/Sears_Re_Presentation_March_2014v2.pdf

Note the term is segregated, not separated from SHC. Note also that reinsurance is a wholly owned subsidiary. The assets of the subsidiary are bankruptcy remote, not bankruptcy proof. They are still part of the holding company and included in the balance sheet. It is true we do not know what they are worth. But there is no basis for believing they are the "most valuable properties"

We don't know how much the now infamous 125 properties are worth as even Bruce Berkowitz, the second largest shareholder can't find out. it is easy to sit here and call people fools and say that what they are saying is nonsense, when you yourselves don't know. (It is fun to come and post on a forum and get to feel like an expert, I understand). The properties have not been earmarked or "set aside" as collateral. They have been legally separated from SHLD. So, therefore they do not appear on the balance sheet. If they were included in the balance sheet, they would be subject to bankruptcy seizure.

Agree whole heartedly with the poster who talked about how misunderstood this whole mess is. There is not unicorn holding secret real estate worth vast amounts of money. there has been decent analysis done on the remaining properties (look it up on Seeking Alpha) and while there might be some upside not the 2.3 billion in PPE assets on the books, it isn't 10 times that, it isn't even double that. Sears owns more or less 400 properties, and a good chunk of them are already pledged to the pension fund or other short term loans sears has taken on. Think most stores are like the store in Wausau WI that was just sold to the city. It has an assessed value of $4 million, the city bought it for only $700,000. think that is far more the norm than the unicorn assets some bulls are hoping for.

The 125 properties in the reinsurance are there for just that insurance. Sears does not go to an Allstate or Nationwide to get insurance they self-insure, meaning they put aside assets for lawsuits, service problems, to cover third party vendors or contractors who may go out of business. Nothing special most large corporations do this.

The problem with all the speculation about SHC going under is that corporate is very secretive about their intentions and what exactly "transformation" means. Just like their "member centric" ideas. Most DM, store managers and especially employees have no clue as to what is going on. One minute it is the pantry that is going to save the company, six months later it is softlines, then is is all about online sales, and on and on and on. NOthing works or makes sense and it wears people down.

It's incredible the amount of misunderstanding generated by the situation. 125 properties were transferred to a separate subsidiary as backing for SHC's self insurance program. It's a separate subsidiary of the holding company, but not "off the balance sheet". It's still part of the holding company and its assets are counted in the total. There is no evidence that these 125 properties are the "most valuable" of the SHC properties. No such statement was ever made by the company. They almost certainly are not worth $20b. There is nothing special about June 2017.

The $20+ billion in "hidden assets" is a myth promoted by a couple of newsletter writers, who do not understand accounting. They found a high asset number in the footnotes of the annual report, but don't bother with the corresponding high liability shown in the same table. The footnotes show internal transactions, essentially money SHC owes itself. There is nothing "real" there.

No doubt some of the SHC properties are worth more than shown on the books. Many others are worth less. After years of pushing the real estate, I suspect all the easy sales have already been done.

No one has a crystal ball about the ultimate future of the company, but based on financial history and published reports it is possible to make reasonable predictions. There is no evidence that any of SHC's strategies are working. They have been babbling about the "transformation" for years now, and sales, profits keep getting worse. Losses are huge, cash is running out. Store operations are crippled by the ongoing cost cutting. Eddie Lampert may have a few more tricks to keep this wreck alive awhile longer, but failure is near certain.

125 properties worth $160 million each ... BS.

Those properties are tied up as collateral for Sears reinsurance.

The most valuable properties went to seritage.

Since Lampert is a hedge fund guy, not a retail guy, take another look. All he has done the past ten years is to use financial tricks in the company. The 125 are not on the balance sheet because they are listed as a separate entity that is to be used as collateral for potential lawsuits. They are, from a legal standpoint, not considered part of Sears Holdings. That is why they are immune to bankruptcy. The other thing is that these properties were put in years ago, long before Seritage. They were deemed to be the MOST VALUABLE in the company's portfolio. If he were to defund the subsidiary and include them on Sears's books, then he would have to sell them and use the money to keep funding the failing company. Basically, just waste it. He keeps loaning money to the company to avoid bankruptcy until June of next year. second largest shareholder Bruce Berkowitz also keeps loaning money, for the same reason. They wouldn't keep putting money into the company knowing that they will lose it anyway, unless they know that there is a major upside to the death of sears Holdings. When it dies and the bankruptcy is over, the shareholders will still own the subsidiary, namely Eddie and Bruce. Don't think for one second that these mofos don't know what they are doing.

Ridiculous post- if those 125 properties were worth $20 billion they would be shown on the balance sheet of the company - they aren't- those 125 properties are not in a reit. While no one has a crystal ball we do know with current assets current liabilities and current burn rate this company cannot last for much longer than 2 years. I would encourage all posters to look at the balance sheet of Sears - it's the only thing that s regularly audited- it's the one thing that you can trust to show a fair value of assets without having to guess- if it's not on the current balance sheet it does not exist.

Eddie is only going to keep sears holdings open till June 2017. That is when he and his gang will have the 125 prime properties that were put in the REIT. That was part of the deal, he had to keep the company in business 24 months. The time is up June 2017. He is pumping money into the company to keep the vendors shipping merchandise through the 4th quarter, and to keep some of the doors open.Those properties are estimated to be worth 20 billion dollars. So you see, Eddie and his gang will come out smelling like a whole bouquet of roses, while everyone else is stuck with no job, and an underfunded pension.

On another site a commenter made this observation about Sears; the term "going out of business" can be subjective. SHLD may continue on for many, many years as a business entity, however, in their opinion, you will not be able to walk into a brick and mortar Sears/Kmart store by the end of 2017. So both opinions could be correct, Sears/Kmart stores are going out of business in 2017 and you would need a crystal ball to determine when SHLD will come to an end.

This is a ridicules post no he cant pull the plug at one time, he loaned the money because sears was so completely broke that they couldn't get thru the 4th q without it. He needs to string Sears along long enough to be able to s--- the value out of the stores thru Seritage. Seritage doesn't want to kick Sears out all at one time, they need more time to transform the properties for sale and release.....