Thread regarding Sears layoffs

Good Question, I am wondering if the so called changes are still being rolled out on September 9th?

Did anyone notice that they pushed back the 2nd quarter earnings release date. It was supposed to be the 18th but now its the 25th. I wonder if the other earnings announcements from competitors means they are changing their plans.

As part of the deal with the pbgc - if Sears holdings market cap falls below $1 billion they can seize control of the assets pledged to them as collateral - so some real estate sites as well as kenmore, diehard and craftsman brands.

Clarification: When using the term "settled" I did not mean to imply that the financial obligations were necessarily paid off, but that the terms of the financial obligations could have been renegotiated as well. So many nitpicking details; good thing I'm not lawyer!

Many of Sears debt obligations are short term. Payments to vendors are mostly settled in months. Loans to sustain company operations are settled in a year or two. I would suspect that some of Sears debt obligations at the time of the REIT formation have already been retired and a majority will be within the next year; thus diminishing the threat of claw back lawsuits related to that event.

Despite Sears dismal credit rating there seems to be no shortage of parties willing to extend credit or loans. Sears has yet to default on any of its financial obligations and one can only speculate as to when such an event might occur. If Eddie can manage an orderly dissolution of the company then Sears, or some semblance of it, could remain in business for a number of years.

I can't see how Eddie can stretch things out for two more years, let alone one!

Thank you for pointing out that error. The date should have read mid 2018.

Seritage was formed in the beginning of July 2015 though - that would only be two years.

When a company engages in financial or asset transactions that are possibly harmful to its creditors or debt holders, an aggrieved party can sue the offending company to "claw back" assets to compensate for the loss they incurred. The time period allowed to sue for a claw back is generally three years from the date of the offending transaction. A claw back suit is mostly triggered when a company fails to pay its debts or files for bankruptcy. The end of the claw back period for most of the REIT transactions initiated by Sears is mid 2017.

The Sears Pension Fund is insured by the Pension Benefit Guaranty Corporation (PBGC) , a federal insurance agency. The PBGC and Sears entered into an agreement to "fence off" some of Sears assets. These assets would become the property of the PBGC in the event that Sears fails to make its required payments to the pension fund or would file for bankruptcy. This was done to ensure that most of the pension's current and future obligations would be met.

It is because he is also a majority shareholder of the real estate trust as well. If sears Holdings becomes insolvent, it will look like he transferred assets out of a sinking ship to avoid them being seized by creditors.

a head cashier would be invaluable but those are gone, too

about pensions? are there any lawsuits (class action) before bankruptcy occurs ?

I think if the REIT isn't "mature" the Feds will force him to turn over those properties and possibly more to guarantee the pension liabilities.

Yes, I am wondering that also.

What are the details of Eddie needing to keep Sears running through next summer? Someone in another topic stated that it has something to do with the Seritage REIT but you mention the pension shortfall? Can you explain?

I agree fully, I expect massive store closings after Christmas. Customers will not shop in stores when only 1 register is open and the employee is ringing up as fast as they can. But the register cannot keep up, ironically during the liquidation sale I was in I rang everything up, bagged it. Had to wait 5+ min for the system to catch up so the customer could pay and leave. Then again when the outdated systems and server is overloaded crap crashes.

Actually during the liquidation sale, if something was pennied out/said enter price at register, I already had an RMU beside me to check the price to keep lines moving. It was hell but it was fun in a good way, but hard to watch the store close.