Thread regarding Sears layoffs

My favorite part of this is when Judge Drain makes equitable rulings to make sure at least the administrative stuff like court fees and lawyer fees go through. I very much doubt Judge Drain wants to set the kind of precedent where the lawyers and court get screwed over by a self dealing shyster.

@iruw

That is technically true however the judge basically told the creditors already they’ll have to litigate after the fact because getting the sale done in a timely manner was necessary to preserve the jobs. You can say Eddie picked the right judge. I very highly doubt, unless he has a sudden change of heart he’s going to go about doing that.

If anything is done it’s going to be after the fact and probably in terms of cash payouts. That’s even if they can even prove something illegal was done. The corporate structure Eddie set up is complete and that stuff will likely take years to sort through.

@iopt you don't understand a thing. If post petition creditors don't get their pound of flesh out of old Sears, they're perfectly justified in going after New Sears. The bankruptcy isn't closed yet, and the judge can still make all kinds of rulings vis a vis the assets. Bankruptcy judges even overturn real estate sales closed decades ago due to technicalities, much less asset sales he oversaw himself.

A person cannot sue God, or themselves. Either way Eddie is approaching this, it won't work. Where are those eager candidates for the next election? Busy paying themselves.

@zng

Finally someone who understands what is going on.

Eddie is just going after old Sears to try and claw some money back because he claims they were reporting things inaccurately in terms of merchandise orders.

This will effect bond holders, possibly employee severance and a few vendors who likely already bailed if they’re still holding out at this point.

Current merchandise shortages are due to the length of time of retail ordering cycles. Even if merchandise was ordered on the day of closing some of that stuff will take 3-4 months to get to stores by the time it’s processed from the vendor, shipped to the warehouse and shipped to the store. The few vendors that were not demanding cash up front are shipping already and have been almost since the closing date.

@xow No...that's really not the point of the article. The point of the article is that if old Sears is administratively insolvent, then a plan of reorganization may not be confirmed, and therefore unsecured bondholders will receive nothing. Do you care about that?

The sale has already closed. Newco has its own additional lines of credit. They want to sue oldco to try to get slightly more money.

I recall the last town hall I attended before the ax fell, Leena and Eddie were talking about the Kenmore Ovation mixer , like that was going to save the company... what a bunch of BS. I visited the Sears Woodfield store yesterday (Sunday March 10) and the whole upper level is a joke. Lots of open space and a very slim selection of small appliances (not even many 'Ovation mixers). The 'furniture' dept looked like something from "Goodwill". Whatever couches and recliners left were worn and tired looking. Kids department clothes were OK, but sparse selection of cribs and juvenile furniture. Downstairs lots of large discount stickers all over the place. Woodfield is supposed to be one of Sears' best stores... if this is the best they can do then they are in real trouble. JC Penney, (also in some trouble) looked much better overall... maybe they are preparing to give the upper level back to Simon properties and downsize the Woodfield store... sure looks that way. The new dining pavilion upstairs was very crowded along with Rain forest cafe downstairs and Level 256 ... if you can't get foot traffic into the store with these nearby attractions, then there is no hope.

The point of the article is that the sale may not be closed due to the disagreements between the two parties. Newco has no cash except what oldco transferred to it. Chapter 7 may be on the table relatively quickly here.

That's not at all what the article says. The sale closed on Feb 11. It is officially done. That's why the only way they can resolve things now is through the judge, mediation, and litigation.

The article is more concerned with the impacts to investors, vendors, and former employees who are owed money by old Sears. Yes, this could impact severance of former employees who were laid off. But current employees should only be concerned with new Sears, not old Sears.

Because.....As the article says the sale has not officially gone through yet. SHLD and Transform haven't closed everything out because of the issues that were discussed in the article. So effectively Old Sears is still Old Sears and employees are not officially employees of Transform Hold Co yet.

It's important because the longer it goes without the sale officially closing then the likely hood increases that the sale WON'T officially go through. If the sale falls through then Old Sears is insolvent and employees will be stuck with the insolvent company.

What would it matter if Sears was out of money in February? That's old Sears, not new Sears.

Here's the part you care about:

It could also mean that Sears is “administratively insolvent” and may not be able to exit Ch.11 using the traditional method of exiting after a confirmation of a reorganization plan. For employees, it could mean that there may not be $40 million available to pay severance pay.

If you haven't already started now would be an excellent time to begin looking for other employment. If SEARS was already out of money back in February then just imagine how fast the ugliness will start precipitating now that we're a month out from the court decision.

This is the real deal.... Anybody with a real sense of logic understood this months ago, but apparently the people saying "sales are up", "we're gonna turn a profit", "vendors have come back", "things are getting better" need a wake up call.