Lampert to ask court for access to Sears Canada restructuring documents
[Reuters]
Reuters July 12, 2017
5 replies (most recent on top)
Sears Canada and SHLD are q marriage made in heaven. It will rival the success of the Sears/KMart marriage and propel the company to greatness. Rumor has it Bezos is thinking of selling everything he's got in Amazon and buying into this deal!
Sears Canada second quarter results will look like a nightmare. No one speaks about the commission paid sales people who are losing money due to cancelled sales, frozen inventories and vendors who refuse to ship., but who still show up for work. Seasoned personnel are quitting and walking off the job, restructuring should include retaining of your sales force.
Eddie and Bruce have expressed an interest n purchasing some or all of Sears Canada's ["SRSC"] assets. It's about money. It really is that simple.
Suppose ESL is their largest secured creditor and is owed $300 million. Imagine without any additional interest in the assets Hudson's Bay would swoop in and purchase all of the assets for $100 million. This would allow SRSC to pay back ESL $100 million; but remain in debt to ESL for $200 million; but have no remaining assets to pay him off!
fyi:
SRSC is in bankruptcy in part because their largest share holder forced them to pay a $500 cash dividend at a time when they could least afford it.
With the added interest in the assets by Eddie and Bruce; and being owed $300 million the court will allow them to "Credit Bid" the assets up to the full amount owed. They bid against Hudson's pay for the assets; and eventually have a winning bid of $300 million. The debt is wiped out; and the assets are awarded to ESL; with no money changing hands. ESL is now aware Hudson's Bay was willing to pay almost $300 million for the assets. Eddie and Bruce arrange a private "Quick" sale with Hudson's Bay of the assets for $250 million. [ESL could apply real money above the amount owed; should they desire to do so.]
Which scenario is best for Eddie and Bruce? Scenario 1 where Hudson's Bay receives the assets for $100 million and ESL is left being owed $200 million; or scenario 2 where the same assets are awarded to Eddie and Bruce for their credit bid? It should be fairly obvious.
Eddie controls Seas Canada. i think this is a PR ploy
all about protecting fast eddie interest in sears canada - he oprobably thinks their restructuring won't be beneficial to shareholders i,e, fast eddie so he wants to challenge it