Thread regarding Sears layoffs

Just wait until someone finds all the accounting tricks they have been doing at HE for years. The inventory in the stores is no where near what they say and their are a few more little lies that they have been doing to get loans over the years. Just a little heads up for whoever wants to take a look.

.....1.8 billion that PBGC would have the right of first refusal on. In the event of that happening, and assuming SHC actually could get 5.2 billion in a liquidation scenario (doubtful), the 1.8 billion would be split between PBGC and the remnants of SHC to prevent administrative insolvency. These creditors wouldn’t see a nickel of it.

the judge could under certain circumstances , like a future bankruptcy in lending money force Eddie to convert his secured debt to stock and that would leave about1. 8B more for the creditors to split that could wipe out eddies wealth too.

blah, blah, blah.....

@2dyb

Malfeasance isn’t limited to public officals. The cause of action can be brought against nearly anyone who takes action intentionally harmful to their company, shareholders, etc. Multiple Enron execs were subject to corporate malfeasance suits in civil court. The unsecured creditors here are guilty of it because by their own admission they breached their fiducuiary duty to their investors in continuing to loan money to an insolvent SHC for several years.

@2shg

malfeasance {mal-fee-zuh ns]

WORD ORIGIN

noun Law.

the performance by a public official of an act that is legally unjustified, harmful, or contrary to law; wrongdoing (used especially of an act in violation of a public trust)

If only, the unsecured creditors had followed your logic/advice in 2016 and not illegally loaned Sears money.... none of this would have happened

@1uxa

No one is dicussing banks here. They’re going to get paid, and they know it. That’s why they haven’t filed jack contesting the sale. We’re discussing unsecured creditors like those who filed the objecton.

They’re malfeasant according to their own objection. Somehow, in spite of being insolvent since 2012, SHC made it almost to 2019 without filing BK. If SHC was in fact insolvent after SHOS (2012), LE (2014) or SRG (2015), then these creditors failed to do due diligence when they extended the loans sometime in mid 2016 at the earliest. By that point, according to the UCC, SHC had been de facto insolvent for about 4 years. The fact that the UCC is only realizing this with the BK means they failed in their fiduciary duty to their shareholders. You do not lend money, repeatedly, to an entity which you believe has been insolvent for 4 or more years.

They’re fools for continuing to loan money to an (according to them) insolvent SHC, and then they’re fools for thinking they’re going to get anything in the event of liquidation. Their objection is filled with fluff that isn’t relevant, or they are grossly over-valuing. They should have made an attempt to have Eddie/ESL declared a bad actor when he announced he was bidding, not 10 days prior to the sale. However, they would have been better off to have objected to Eddie being allowed to bid at all, not waiting until he had already won and everyone else was proceeding as if ESL has already taken possession.

OP

The creditors are guilty of maleficence for loaning money to Sears? The banks will get paid, Banks are not stupid, they don't loan millions of dollars without the debtor putting up collateral.

The unsecured creditors are fools for objecting at the last minute? When were they supposed to object, before the bid by Eddie/ESL was submitted, negotiated and its terms released/made public?

Objections were due by January 26th, the creditors are no more a fool than people who wait until the 15th of April to file their income tax returns.

There isn't much here. 150 pages of old trademarks mostly worthless outside of Sears itself. A bunch of worthless websites like alfiesucks.com there is nothing the creditors could hope to recover anything on here. So if they force a liquidation the lawyers will eat up everything because the stores don't have much inventory since they're counting on Eddie's credit revolvers with his bid.

Much of this is pure speculation. It claims Sears was effectively insolvent prior to these transactions yet they still were able to unload Craftsman after this for $1 billion after all these claimed insolvent points which if they could means they were not insolvent at that point therefore rendering the argument baseless and ineffective.

JCP invested in store remodels where Sears did a stock buyback and are in financially bad shape too. To argue remodels would have saved Sears is a stretch like saying SYW would save Sears.

Speculations as to Seritage real estate values are just speculation, unless they were sold then there is no proof.

Orchard Supply closed after the spinoff and was likely a damaged business. SHOS stock price tanked after an initial pop meaning the initial pop wasn't because the IPO was undervalued its because people never looked deep enough first at their underlying fundamentals.

The SEC is legally barred from bringing fraudulent conveyance charges, along with almost anything else that could be brought up, but that’s the big one. The SRG transaction closed 7/2015. Fed statute of limitations is 3 years. He stretched it out just long enough to get the feds off his back. The Craftsman deal is in theory in play, but if that deal is voided SHC owes SBD about 700 million they don’t have and that would take precedence over almost anything else. LE and SHOS are all too far in the past for the SEC to do anything. If Elon/Tesla is any guide, the biggest punishment ESL/Eddie get out of this is about a 20 mil fine.

What's clear from that 136 pages is that someone deep on the inside had those lawyers working nonstop from probably the moment the bid was signed. This was done at the behest of someone who was very close to Eddie, and it wasn't Bruce. The SEC will 100% get involved at this point.

@1dss

Aiding and abetting requires criminal investigations and prosecutions which as yet haven’t happened. Probably won’t either, as no one cares enough about Sears at this point to get involved. The feds can’t do it, and the NY AG is too busy grandstanding on other issues to be bothered.

What worries Eddie's cronies now is conspiracy laws and aiding and abetting. If he's found guilty, they'll also go to jail. A lot of people went down in Enron, even though everything was supposedly blessed and got signed off by highly paid lawyers and big 5 accountants at so called arms length transactions. However you call it, no one knows better than the CEO.

@1owb

Look at the lone holdout that still thinks at the end of this Eddie is going down. If everything that has transpired since October hasn’t changed your mind, not much will. I would also challenge you to find one factual inaccuracy in @1fhs’ post.

Really, Eddie should save everyone the trouble and go the McClendon route

@ifhs look at the little boy playing lawyer like a grown up boldly making statements without a lick of knowledge

@fzg

No they can’t. These loans were extended after the SRG transaction closed, which means that it cannot be brought up. It’s rather hard to be guilty of fraud when the assets that were supposedly fraudulently conveyed were not in the possession of the debtor when the loan was extended. There simply isn’t actionable fraud as relates to the UCC.

@kzn

Getting the go-ahead from a Canadian superior court means nothing. It basically means that the lowest level Court in Canada decided that ESL’s preliminary motion to dismiss before anything else happens was denied. That is about the most meaningless part of a court case. I also highly doubt 527 billion was ever at stake here, more like 527 million. There have not been and are not going to be any criminal charges against Eddie or ESL in Canada. There’s no precedent set by anything surrounding SRSC either, because it’s in a different country. ESL has no assets left in Canada. That means that in the event the Canadian creditors do win, they have to go to a US Court to get their money. ESL would contest that and probably win. Anything that happens in the Canadian trial that could not happen in the US (evidence introduced, laws cited, actions by the judge, jury instructons, etc.) will result in a US Court not allowing any US ESL assets to be seized to satisfy the judgement, as it is technically a violation of due process.

This board for some reason has deicded that in the end, Eddie is going to go to jail for eternity, SHC is going to liquidate and every creditor will be repaid in full. None of that is going to happen. Eddie isn’t going to get in any trouble, nor are these creditors going to get anything. Eddie/ESL have the means and reasons to outlast any of these creditors in court. That is what is going to happen.

@fzg Don't forget that Sears Canada got the Go ahead from Canada's Superior Court to go after ESL for their $527B owed! There's precedent for Eddie to pay back every red cent AND criminal charges here

They can sue ESL and Seritage. That's always been their long game. Digging up the nugget called fraud.