Looks like Fast Eddie is still going to have to pay the PBGC the $1.7B he owes them per the licensing agreements with KCD! Lol
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@XljYd2q-you. What an unfortunate ID you were given.
I voted for a third party candidate that was on the ballot once. Not a write-in, on the ballot. I knew they wouldn't win, I just wanted to see how many other people voted for them. I read in the newspaper the next day that my candidate, in my precinct, got 0 votes. Not percentage, votes. It doesn't matter. That was 30 years ago.
Damn right I'm cynical. A valuable lesson at a young age.
It isn’t cynicism. It’s realism. Time and again this board has predicted the closure of Sears. BF was supposed to be the beginning of liquidation. The whole thing was supposed to have closed by the end of January. Eddie wasn’t going to be allowed to credit bid/be able to beat the liquidators/be able to get financing after he didn’t get stalking horse etc. The Judge wasn’t going to grant extensions when the bids weren't accepted at first. At this point, I wouldn’t bet against Eddie winning and getting off scot free. Is it fair? Nope. Is it what’s going to happen? Probably so.
The sale will go through and the aftermath will be litigated for years.
PBGC is yet another unsecured creditor that is screwed either way. If Eddie wins, they get nothing. Because of the way Eddie has run the business in the past, in the event if a liquidation, they’re still not going to get anything. The best they could hope for in that scenario is getting whatever (nearly worthless) real estate they still have liens on and the IP for Kenmore and Diehard, which by themselves are essentially worthless. Transform will come to some form of face-saving agreement with PBGC, and both sides will move on.
@2htk - The PBGC doesn't appear to be hesitant in pressing their case.
https://www.usatoday.com/story/money/2019/01/31/sears-holdings-eddie-lampert-bankruptcy-pensions-pbgc-esl/2708768002/
The PBGC is a government entity. They’re not going to do anything that results in a shutdown; Washington won’t allow 45,000 layoffs, and Lampert would say “I wanted to save the jobs but the PBGC prevented me from doing so.”
There are no other bidders willing to keep the company operating as a going concern. It’s ESL or curtains.
I love how cynical everyone is... " it doesn't make an difference, Eddie will do whatever he wants and win"
Same reasoning people use for not voting.
Creditors had to file an objection or they lose any recourse.
Actually that is not what their claim is about. Their claim is that KCD owes them money; and that they believe Sears owes KCD money; but is an unknown amount to the,m. Regardless as to how big or small; those are funds that could potentially help to partially pay themselves; or some other creditor.
This type of payment is called a CURE cost. To assume assets from his "winning" bid ESL is responsible to pay many cure costs. Being particularly aggressive; which is not at all unusual in a bankruptcy; Sears lawyers claimed that practically every entity they interact with; literally has a cure cost of $0 (zero dollars). They want entities (like Little Caesars and Malls) to sign off that this is indeed what Sears owes them ... $0. Instead practically every entity has come back (and yes there is a Little Caesars one) and filed an objection stating that the actual cure cost (already presented to the court and laid out in formal claims) is $200 thousand dollars; or $ 2 million dollars; and yes there are many cures listed in the millions in files objections). Each claimant has a cure.
... But according to PBGC KCD made no such objection to the stated $0 cure. They take offense to that; suggesting that whoever is controlling KCD is not performing even minimum fiduciary duties; that impact them as a claimant having a valid claim that is almost $2 billion. If Sears owes KCD $100 thousand for example; and KCD owes them at least $ 100 thousand; they would like to know why there was no objection filed by KCD to the improper stated cure cost of zero dollars. That is the basis of PBGC's objection. They are not claiming KCD owes them $1.7 billion. PBGC may not know the amount Sears owes KCD; but they are certain it is not zero dollars.
For the record Sears lawyers claimed practically every non affiliated entity has a cure of $0; and in the few instances (almost all directly affiliated entities) where a non-zero cure is stated; most likely vastly understated the real cure cost. That would be because...to actually take ownership of assets ESL may need to include teems or even hundreds of millions of dollars in cure costs to pay back rent and property taxes etc.
Once the court has cure costs it will need to decide which are valid; and even if valid; which MUST be paid by the winning bidder... if certified to be the winning bidder.
Nothing will likely come of it. Don't forget Sears is still going to get the Craftsman royalty payments from the stuff they're selling at Lowe's now. He'll just earmark the Craftsman royalty payments for the pension fund along with the $250 million payment they're getting next year.
@XljYd2q-qt More like they don't want Eddie to get the business.
I thought KCD (Kenmore Craftsman Diehard) was set up as an offshore entity (Bahamas I think) in such a way that it was untouchable in a BK.
Judge Drain is historically very friendly to the PBGC. Big miscalculation on Eddie's part. They'll probably get in on the ESL/Seritage lawsuit train too.
He'll probably say he will assume more debt forgiveness and lampert's good friend
and probably secret man lover judge drain will say, well by God Eddie I'd say that sounds like an amazing idea, let's do it. He needs to be inundated by a few of these where there's no way to get away with it then he'll have to back out of the 5.2B deal.
Or he can contest the PBGC takeover of the pension plan. I don’t see that happening, they’ll come to some agreement on this, but man is this board obsessed with putting Sears out of business.
Docket 2002 by the PBGC will be used to block Crazy Eddie’s bid unless he keeps his licensing deal on KCD to keep paying down his $1.7B debt to the PBGC.