Sunday, January 13, 2019

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 Long Beach 4th District BLOG:
CSULB Community Meeting focuses on Alumni Center, Puvungna lands and new neighborhood website

Natural Gas sticker shock across Long Beach


New Long Beach Political Facebook page -just in time for (more) elections

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Long Beach Sears and Kmart fate lies in  Bankruptcy Auction on Monday

The fate of the Long Beach Sears and Kmart stores and properties will play out in a high finance drama in New York City starting  on Monday January 14, 2019.

Sears Holdings Corp. Chairman Eddie Lampert's more than $5 billion bid to take over the  remaining 425 stores that are still open will face off against any other proposals to liquidate the remaining assets of the once iconic retailer.

By all news accounts, most of Sears current creditors are skeptical of Lambert's bid through his hedge-fund company ESL. 

Since the October 2018 Sears Holding Company bankruptcy filing, Lampert has been working to save the remaining Sears/Kmart stores and assets and 68,000 remaining jobs.

But some of Sears’ creditors are skeptical of ESL, and it’s not yet known how the hedge fund’s proposal stacks up against other offers for the company’s assets through liquidation.  

Aside from the store properties and inventory, other assets include Sears Home Services business and brands like Kenmore and DieHard. Sears’ intellectual property assets could also be bought by a company that could bring the brand back online or in brick-and-mortar stores.

As a back-up plan, ESL also has reported that it would bid on some pieces of the Sears business individually.

Last week, the Sears Holding Board of Directors signaled they would reject Lampert's original bid of $4.3 billion for the Friday January 11th deadline for an outright sale.

On Thursday January 10th, Sears Chairman put up a required $120 million on Wednesday January 9, 2019 he needed to post in advance to qualify for Monday's auction.

Also on Thursday January 10th, Lampert increased his bid to $5 billion.  That new offer also takes on roughly $166 million in payment obligations to vendors and  gives an additional $43 million to severance costs.  Lampert's ESL  hedge fund will also assume $135 million in tax bills for properties that Lampert hopes to acquire as part of his bid and pick up tax and supplier bills that Sears incurred during bankruptcy proceedings.

Two of those properties are the 4th District's Los Altos Center Sears and the 5th District's Los Altos Gateway Kmart.

Sears creditors oppose Lampert’s  plan because it includes a bankruptcy move called a “credit bid.” .  The credit bid in his $5 billion offer is to forgive the $1.3 billion of Sears debt his ESL company holds and use that "credit" as part of the currency for his offer.  

Last week the Sears Board allowed the Lampert bid to proceed, but the U.S. Bankruptcy Judge Robert Drain who is overseeing the case will have to make a ruling if the credit bid will be allowed.  Drain has stated that the laws favor bids that save jobs, which Lampert's bid appears to do.

In the timeline filed with the court, Sears will notify the Bankruptcy Court of the auction results by Wednesday January 16, 2019.  Those unhappy with the action results have eight days to challenge the outcome in court. Ultimately Judge Robert Drain has to approve the sale of Sears’ assets.

1 comment:

  1. LB Kmart is literally empty shelves and no employees around the back of the store.

    It is depressing to even venture into it.


    Kmart is doomed.


    LB Sears [where Broadway used to reside] is in much better shape.


    All the remaining junk/merchandise from Kmart location could/should be hauled over to the LB Sears bargain basement.


    Might be viable then, and save a lot of jobs.


    Note that Craftsman was sold to Black and Decker about a year ago.

    ReplyDelete