This was posted 11 months ago, the "anonymous" was off about 6 month about the filling date, but otherwise spot on:
Chapter 13 is almost always for individuals only, not businesses. In chapter 7 you just liquidate and walk away. Chapter 11 is a reorganization.
SHC will be a total and complete chapter 7. They have too much debt to reorganize and try to pay any of the debt off. Eddie owns most of the debt through loans and other means. With chapter 7 all share holders and creditors are wiped out except...drum roll please...... those creditors who have a secured debt. Meaning only those whose loans or money has been secured by some asset i.e. inventory or real estate. And who would that be? Hum, let me see. Oh, that would be one Edward Lampert and ESL.
Loans backed by real estate and inventory at 11% interest at that.
Bankruptcy will be in late January or February after they liquidate the closing stores and get through the holiday season. They make money, pay Eddie his interest payment for the loans, file bankruptcy. Shareholders lose, Eddie claims the remaining inventory and real estate to pay off his loans.
Really, quite brilliant.
11 months ago by Anonymous | Post ID: @Q3Q0SdU-1ndx