since shareholders could claw back the properties moved to seritage within 2 years. that anniversay is up in august. It also exlains why more properties have not been moved to seritage as eddie cannot keep this pig alive for anther 2 years. By august sears will have burned through another $1 billion plus of cash and then it can be out out of its misery. its clear no one bid for craftsmen. Lets see just how bad things are today.
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They burn through over $500 million in cash each quarter, they won't last until August. It would be a miracle if they make it to Feb. Suppliers will stop shipping soon and then with nothing to sell, no money coming in and bills still needing to be paid there is no other option than to declare bankruptcy.
there's a 500 million dollar pension payment due in December. It will happen well before August.
If they sold the rest of the real estate for $2 billion the company would eat that up in 2 quarters quarters probably- crazy. Even eddies hedge fund at $1.5 billion probably cannot lend them anything-$300 million is not enough- Sears would eat that in about a month currently.
There is a good chance that Sears will lose $1billion in the 4th quarter. Last year the 4th quarter was the worst of the year - they lost $550 million. This year will be much worse- they just lost $750 million so can easily lose $1 billion or more in the 4th. No way can Sears survive another year with quarters like these- they are looking at losing possibly $3 billion next year- they close stores but the bleeding increases- in 18 months the losses will have chewed up all the assets the company has left.
No, not safe until July 2017. Eddie was trying to hold on until then so he could keep the real estate he basically stole and put into his REIT but as was pointed out in an article on CNBC the "unlawful conveyance" rule in the bankruptcy code that Eddie was trying to skate around is state specific and in Illinois the window to avoid this is 4 years, not 2 as Eddie had hoped. No way can Sears make it until July 2019 so Eddie can keep the real estate in the REIT. Not enough cash to even make it until July 2017, plus vendors not going to do business with Sears/Kmart. Here's part of CNBC story:
"At a national real estate conference in New York City this week, chatter swirled that late 2017 would be the earliest date Sears would file for bankruptcy, so that it could protect the $2.7 billion in assets it sold to Seritage Growth Properties (SRG) and through joint venture deals last year.
Those people formed this thesis upon a piece of the U.S. bankruptcy law called "fraudulent conveyance," which would give Sears shareholders a two-year window to go after Seritage's assets if the department store chain were to file for bankruptcy. The two-year anniversary of that spinoff falls this summer.
However, Chuck Tatelbaum, director of the Tripp Scott law firm and chair of the bankruptcy and creditors' rights department, explained that two-year window wouldn't necessarily apply for Sears. Individual states have longer statutes of limitations on that piece of the bankruptcy code — meaning if Sears were to file for bankruptcy its home state of Illinois or in Delaware, the statute of limitations would instead be four years."
not anymore not with losing 3/4 billion dollars.
So you think I'm OK till July 2017?