I'm curious what the forum thinks as I hear a wide range here from July 8th to two years time to never!
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What a shame that this is even a topic of conversation. None of us knows what really is going to happen day to day, but there is product bought for delivery through the end of the year in my area which is the normal timing, so would think a bankruptcy isnt intended for this year.
Not bankruptcy... just a very slow, but speeding up, liquidation... 200 stores at a time
http://www.voidabletransactions.com/uvta-10-conflict-of-laws.html "A debtor that is an organization and has more than one place of business is located at its chief executive office."
I believe the jurisdiction would be Illinois, not Delaware
SYW is a data mining scheme to get information to sell to third parties. So is the 5-3-2-1 credit card sign up. Information is worth millions to other companies and shopping habits are the most profitable. Every company does it so it isn't just SHC.
Sears Holdings is not an Illinois corporation - it was incorporated in Delaware - the most business friendly state in the country.
In my opinion, it's Shop Your Way that is the goal. Sears, KMart are SYW partners.
Eddie has a fantasy that there is going to be an alternative society of SYW members, doing goodness knows what. Shopping I guess in a quasi closed society. THIS is what happens when an ego driven reclusive guy takes the reigns. No people sense on any level. His hedge fund employees are quoted as saying he is both cheap &unrealistically demanding.
I'm the OP. Thanks for all the amazing insights. You do get some strange commentary on this site but by in large there are some really insightful comments. Looks like the money is on July!
1dva The something else that survives has destroyed what made this company great. And they people that were stepped on in the process.
That is the bitterness we keep reading over and over on this board.
And I get what you are saying. Sears Holdings makes sense. It's only a holding company now.
I hope when they pop their bottles of champagne in July they get a cork in the eye.
1hog-- You use a key word in your last sentence and the leaders of SHC use the word all the time. The word is "transformation". This word is important and is used in SHC's financials as well as any press releases for a reason. It is a key word because it tells investors, employees, vendors and others what the powers that be are trying to do.
What are they trying to do? Transform the business. They are not trying to restore the business or even be an innovator in retail. They are transforming the business to something else.
Websters defines transformation as "a complete or major change in someone's or somethings form or appearance etc." Restoration is defined as "the act or process of returning something to its original form or condition by repairing, cleaning, reworking"
The difference between innovation and transformation is TIME. To transform something takes time, takes a process. Innovation is like a spark that lights a fire. It is quick and must be acted upon quickly for it to become part of a company.
I say this to give everyone the hint that Eddie is not trying to save the retail part of SHC. He is not trying to innovate in the retail industry. He is transforming SHC into something other than a retail company. What that is is the question. Is it going to be a re-insurance company? Is it going to be a real estate company? Is it going to be something else? That is the question.
SHC is not a normal company, they are a "holding" company, hence the name "Sears Holdings"
A holding company is a company that holds enough stock in another company to control its policies and management. So will Sears/Kmart go bankrupt-- probably, but SHC will survive in some other form-- the transformation part. No more brick and mortar retail but something else will survive.
This is spring and the time of year when appliance manufactures come out with their spring lines.
Guess what? No spring lines at Sears. Nothing.
We aren't getting anything.
These guys are buying stock to keep us limping along until July. Don't kid yourselves.
We should be putting new floor models on the floor as we speak. We can't. No new floor models. No new stock.
Heck. We can't even get VACUUM CLEANER BAGS!!!
Isn't anyone paying attention?
A transformation means things are getting better. Not that manufacturers aren't giving Sears their new spring line of appliances.
I think that it could be in late July 2017 at the earliest and December 26th at the latest (it'd be just like Eddie (aka "The Grinch") to file bankruptcy just after Christmas to prevent post-Christmas returns!!).
My store closed on March 26th., and I have 18 or more years at Sears, and I received a letter about my pension. I am going to cash out my pension it is not much believe me. I will turn 55 this year and I am able to get my pension. Sears has not funded the pension in years. So I am not getting much. I will roll over my 401(k), as soon as my severance stops. A HR Lead, came to our store because be had questions regarding our lay off and things, and she told me to get my 401(k) out.
yes certain states have a longer clawback law but its very limited, for the most part eddie just needs to get thru July to keep all the properties. a few random ones may give him problems in the few states that have a longer clawback law but the majority will be all eddies soon
If Eddie wanted Sears to succeed he would have made changes years ago. We are not being negative but facing reality. So regardless of what management is saying, we can read and research for ourselves to find out the truth.
Take the money and run! Roll it into an ira as fast as you can. Managing investments is not difficult l, you will always be better off getting your money out of sears hands!
@eti , I stand corrected. I got confused and though IL would be done this July.
The federal lookback period is meaningless. Illinois fraudulent conveyance law gives a 4 year lookback period, so they'd have to make it to July 2019, which I don't think they will.
July 10 2017. 9.29 AM. EST.
I'm in the summer 2017 camp. After the threat of claw back is gone. Before the holiday season.
My husband just retired after 40 years with Kmart. You can no longer take a lump sum to roll over into an IRA. And the monthly annuity amount has changed.
@wqs nice comment, thx
I would go for after July and before holiday 2017 so my money will be on September 2017. Would be great to get though holiday but I find that a stretch.
Just take everything said on here with a grain of salt so to speak. For the retirement scenario, check with your financial adviser. He/she would be someone you trust that has worked with you for years and knows your financial needs.
As far as discussing potential bankruptcy, it really is what it is. You don't know from day to day what will happen anywhere. You could work for a great company with no issues, and they could decide they don't need you anymore. It happens. It is hard sometimes to admit that none of us know with certainty what each day brings, but it is the truth. Just try to be happy from day to day, try to save what you can, and be good to the people around you and have compassion. Do you think any of the folks who worked at Andersen Consulting years ago ever would have guessed their great jobs would be gone?
So you can come at it with a negative attitude saying everyone is out to get everyone, or you can take a positive approach and realize most people aren't that way. Most people are just out there working along trying to do the best for their family at all income brackets. I don't know why some people seem to "delight" in trying to scare other people or somehow think they are doing anyone a favor by pointing out something that they really don't know for a fact.
I'd get your money out of their hands. I heard when United Airlines pension was taken over their long time employees got SCREWED!
yky, I believe you mean Fully Vested. That is a huge huge huge difference from fully funded. There are two ways to handle your situation. One--take the money, and roll it into an IRA. That way you are guaranteed to get 100% of the money that they promised you. You will have to pick some investments (I whole-heartedly recommend Vanguard ETFs, with a 50/50 mix (since you are probably in your 60s) of stocks and bonds. You can set up a WealthFront account for free to get their recommendations on a mix of ETFs.
The other way you can approach it, is to hope that when (not if) the pension is taken over by the PBGC, that you will continue receiving full benefits. Since you are probably not above the earnings cap, then I think you will be made whole. But I can't promise that.
The letter is true. They have enough money to pay out everything they need now. But say 10 years down the line and another 100,000 people added to the database of beneficiaries to pay out to and they are going to have problems. If you can somehow take that money and put it into some sort of an IRA I would do that and get it out of their hands!
Thanks for your input everyone!! I do appreciate it!!
Realistically I don't think sears would want to fund another holiday season. As optimistic as I try to be for you guys since I was once one of you.
Keep in mind, that July date everyone keeps throwing around is a complete guess. They have no idea of that date is truly fact or not. The exact same thing happened when the wannabe yahoo stock traders tried to say once the stock prices fell below $10.00 and people came here to start a doomsday countdown. The stock fell to the 7s and nothing changed. No one really knows. Just remember that.
No one told me a ,got a letter yesterday that states its funded this year! Are they sending fictitious letters??? Plus I am one of the few that like to work. In my lifetime I have often worked two jobs and made sure my family life was never affected
Whoever told you the pension is fully funded is not correct. They have I'm sure enough money to pay out the needs of the beneficiaries for now, but not forever.
If you don't believe me just enter in Google "sears pension obligations" and see what comes up.
And please understand I'm am in no way trying to scare you, rather help you prepare ok.
Thank you for your 40 years of service thats frigging AWESOME!
TO: Poster @Myd31pg-yky with the 40 year OTJ get off the fence and learn how to read a companies 10-K the Craftsman deal didn't even make a large dent in the pension underfunding
"I got a letter yesterday telling me that the pension is fully funded ,"
You may have received a letter but it certainly wasn't from whom you may have expected it from
"Our pension and postretirement benefit plan obligations are currently underfunded, and we may have to make significant cash payments to some or all of these plans, which would reduce the cash available for our businesses.
We have unfunded obligations under our domestic pension and postretirement benefit plans. The funded status of our pension plans is dependent upon many factors, including returns on invested assets, the level of certain market interest rates and the discount rate used to determine pension obligations. Unfavorable returns on the plan assets or unfavorable changes in applicable laws or regulations could materially change the timing and amount of required plan funding, which would reduce the cash available for our businesses. In addition, a decrease in the discount rate used to determine pension obligations could result in an increase in the valuation of pension obligations, which could affect the reported funding status of our pension plans and future contributions, as well as the periodic pension cost in subsequent years. Moreover, unfavorable regulatory action could materially change the timing and amount of required plan funding and negatively impact our business operations and impair our business strategy.
On March 18, 2016, we entered into a five-year pension plan protection and forbearance agreement with the Pension Benefit Guaranty Corporation ("PBGC"), pursuant to which the Company has agreed to continue to protect, or "ring-fence," pursuant to customary covenants, the assets of certain special purpose subsidiaries (the "Relevant Subsidiaries") holding real estate and/or intellectual property assets. Also under the agreement, the Relevant Subsidiaries granted PBGC a springing lien on the ring-fenced assets, which lien will be triggered only by (a) failure to make required contributions to the Company's pension plans (the "Plans"), (b) prohibited transfers of ownership interests in the Relevant Subsidiaries, (c) termination events with respect to the Plans, or (d) bankruptcy events with respect to the Company or certain of its material subsidiaries.
The Company will continue to make required contributions to the Plans, the scheduled amounts of which are not affected by the arrangement. Under the agreement, the PBGC has agreed to forbear from initiating an involuntary termination of the Plans, except upon the occurrence of specified conditions, one of which is based on the aggregate market value of the Company’s issued and outstanding stock. As of the date of this report, the Company’s stock price is such that the PBGC would be permitted to cease forbearance. The PBGC has been given notice in accordance with the terms of the agreement and has not communicated any intention to cease its forbearance; however, if the PBGC were to initiate an involuntary termination of the Plans, our financial condition could be materially and adversely affected."
Sometime before the holiday season this year. Between August and October.
Summer 2017, if we make it that long.
Admirable! 40 years of service! It sounds like you have worked hard, and you are lucky to have a pension as in today's world that is pretty much unheard of. I of course am by no means smart enough to know your situation but if you can afford to why not take your pension and retire? I am sure you deserve it as you have worked for a long time and have enjoyed your career!
I am one of the few literally on the fence. I will have 40 years this July and I wanted to reach this milestone. I got a letter yesterday telling me that the pension is fully funded , which means I can roll over my entire pension to a IRA! I am truly torn. I loved what this company was! But don't want to risk my pension!
Why so negative? Why always assume the worst? I am certainly intelligent enough to understand this, but I don't think that way.
Hiring people to make it look like you are still trying to keep the business afloat. When shareholders want to file a lawsuit against members of the board of directors, it sure helps in front of a jury to have your lawyers detail a stream of "activities" that you have done your corporate best to keep the company afloat. "Members of the jury, why would I be hiring people with such great skills and capabilities if I failed in my fudiciary duties, like the plaintiffs allege? "
Interesting. How does anyone know from day to day what will happen? Why so much negativity around Eddie Lampert? Why would he bother to hire a new VP of HR (Chief People Officer new term) if he was just planning on filing bankruptcy? And think of all the companies who have reorganized through bankruptcy to become a better company?
It's unfortunate that Sears isn't the same company it was years ago, but there is a history and there are LOTS of hard working people in the stores and the corporate headquarters. And there are lots of vendors involved and the towns that receive tax money from those vendors and on and on.
Why must everything be turned into such negative news? Why not present the question as what would it take to make Sears succeed? Who would ever want something to happen to Sears as it would affect so many jobs that could hurt multiple layers of companies and people.
July 2015 Eddie spun off 235 of Sears's best real estate locations for less than they were worth to a company called Seritage for $2.7 billion. And of course he is a big share holder of that company. I have read that in the state of IL they have a 2 year law on what is called a "fraudulent conveyance" rule. Part of this rule is that if a company goes bankrupt they can use a part of the rule to claw back assets that were sold as far as 2 years earlier. So Eddie is doing everything he can to get Sears's past that 2 year mark so they can't claw back the 235 properties. That date I believe is July 17th that he has to hit. After that he has pretty much all the good assets Sears ever had and will walk away and let the company crash.
I would go for the summer 2017