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so, the only things the butt boy twins were able to load today were their diapers. became too heavy to catch the departing train. now they want us to believe they are flipping while waiting for their entry point? PUH-LEEZE
from docket #2839 filed today:
Since, the closing of the Debtors’ sale to the Buyer, the Debtors have been
focused on transitioning the businesses and employees to the Buyer, identifying the unexpired leases and executory contracts that will be transferred to the Buyer, establishing an orderly means of resolving the claims through the Bar Date Order, and preparing a chapter 11 plan to wind down the Debtors’ estates and close the Chapter 11 Cases.
did some searching on the matter and couldn't find anything, hence, the "fly on the wall" attribution.
interesting and if true, could provide a relatively quick exit.
CDS's, Aurelius and Windstream bankruptcy
don't play in this arena, have only read through the article once and don't yet completely understand it, but find it intriguing.
https://talkbusiness.net/2019/03/wall-street-looks-for-fix-to-shady-credit-default-swap-market-amid-windstream-bankruptcy/
chemist,
my recollection of the agenda for the omnibus hearing on march 21 was to provide an update on the por.
however, in the recent filings responding to lampert's request for a mediator to be appointed to resolve disputes between holdco and old sears, olds sears filed another request which objected to the request for a mediator. old sears also filed a docket requesting the judge to order lampert to turn over $57.5 million that lampert was "holding hostage" which had nothing to do with the mediation.
these were evidently "money in transit" which was to be turned over to old sears once received by lampert since old sears had allowed holdco to utilize old sears' cash management system because holdco had failed to set up their own cash management system when the closing took place on february 11.
in the motion requesting the judge to order lampert to turn over the money, old sears said not having that money was placing old sears in danger of becoming administratively insolvent and it was jeopardizing old sears' ability to draft and present a por.
so, i don't see how a por could be filed on the 21st of march.
missed the filings talking about the omnibus hearings in april and may which you referenced so not sure the subject of those two hearings.
my feeling regarding what an update might include would be more along the lines of "we're working on it", "expect to file it by ____", and based on the recent filings possibly something along the lines of "we can't provide an update because we don't have the money to pay the lawyers to work on it because lampert is withholding funds owing to us which are necessary to advance the preparation of the por".
absolutely would be surprised if there are any specifics, especially as it relates to common shareholders.
expect a lot of fireworks at this hearing, a lot of smoke, but not much clarity on the por.
further "inside the box" thinking, also from the same fls's in that 8k states:
The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which could include the following: the Company’s ability to realize proceeds from remaining assets and the terms and conditions of any such sales.
it's precisely those assets sales which are specifically referenced in the 8k i suggested were the source of the "distributions" some people were reading as dividends.
sometimes actually looking inside the box will provide the answer.
this from the fls: doesn't seem too cryptic.
risks related to the trading of the Company’s common stock on the OTC Pink Market, particularly in light of the fact that the Company does not believe that there will be sufficient funds or other assets in the Estate to allow holders of the Company’s common stock to receive any distribution of value in respect of their equity interest
re: the commentary on "distributions", my take is this has nothing to do with dividends.
old sears is liquidating, i.e., monetizing what is left of their assets. the "distributions" discussed relate to distributing the money received from the liquidation process to those with their hands out in order of preference.
what shc is saying in this 8k filing is that there are too many in line ahead of the stockholders for stockholders "to receive any distribution of value in respect of their equity interest"
other than taking issue with the idea of "buy out 42.9 M of Windstream stock", could see it as a merger.
remember the "worthless stock" docket. that was done to prevent change of ownership issues which might negate the nols. so strictly speaking, at&t or any other entity interested in win would not just start accumulating quietly. that docket put in place reporting requirements, not to mention sec reporting requirements.
windstream is in my area competing directly with at&t. not sure what antitrust issues might be raised, especially given at&t's recent battles. an attempt by them might just get too hot to handle.
still, merger seems like a good option and in the case of a merger, if the nols were a major point of interest to the interested party, seems like stockholder preservation in some form would be much more likely.
won't/can't format properly but here is list of top ones, from docket #1, page 8
LIST OF EQUITY SECURITY HOLDERS3
Debtor Equity Holders Address of Equity Holder Percentage of
Equity Held
Windstream Holdings, Inc.
BlackRock Institutional
Trust Company, N.A.
400 Howard Street
San Francisco, CA 94105 8.00%
The Vanguard Group, Inc. 100 Vanguard Boulevard V26
Malvern, PA 19355 7.53%
CQS Cayman LP
53 Market St Gardenia Court
Camana Bay, Grand Cayman KY1-
1104
4.63%
Elliott Management
Corporation
40 West 57th Street
New York, NY 10019 4.31%
Brigade Capital
Management, LP
399 Park Avenue
Suite 1600
New York, NY 10022
4.01%
Renaissance
Technologies LLC
800 Third Avenue
New York, NY 10022 3.78%
PointState Capital LP
40 West 57th Street
25th Floor
New York, NY 10019
3.03%
JP Morgan Asset
Management
245 Park Avenue
New York, NY 10167 2.70%
BlueMountain Capital
Management, LLC
280 Park Avenue
12th Floor
New York, NY 10017
2.32%
Citadel LLC 131 South Dearborn Street
Chicago, IL 60603 2.31%
Charles Schwab
Investment Management,
Inc.
211 Main Street
San Francisco, CA 94105
2.20%
State Street Global
Advisors (US)
1 Iron Street
Boston, MA 02210-1641 2.20%
Invesco Capital
Management LLC
3500 Lacey Road
Suite 700
Downers Grove, IL 60515
1.37%
Spark Investment
Management LLC
150 East 58th Street
26th Floor
New York, NY 10155-0002
1.17%
Northern Trust
Investments, Inc.
50 South La Salle Street
Chicago, IL 60603 1.10%
3 This list serves as the disclosure required to be made by the debtor pursuant to rule 1007 of the Federal Rules of Bankruptcy
Procedure. All equity positions listed are as of February 15, 2019. By the Debtors’ Motion for Entry of an Order (I) Extending
Time to File Schedules of Assets and Liabilities, Schedules of Current Income and Expenditures, Schedules of Executory
Contracts and Unexpired Leases, Statements of Financial Affairs, and Rule 2015.3 Financial Reports, and (II) Waiving
Requirements to File Lists of Equity Holders filed contemporaneously here
linda,
sounds correct:
The U.S. Trustee picks the 7 largest equity holders listed in the bankruptcy petition who are willing to serve on the committee. However, since equity holders are the last to receive anything, their influence is considerably less than the creditors' committees.
do you recall a listing of the largest equity holders in the bk petition?
i don't believe they do. their investment guidelines are as follows:
their investment guidlines indicate a 60% target for U.S. Bonds and money market funds. and 10% for U.S. and international bonds which are high yield in developed and emerging markets. 15% in U.S. stocks including publicly traded U.S. REITS and 13% in international stocks in both developed and emerging markets. and 2% in private equity and private real estate (from terminated plans).
earlier comment and post showed that pbgc was named to the ucc. they would be a wonderful member if any equity committee were to be formed.
from the article:
These valuable “assets” will not be extinguished as a result of Sear’s bankruptcy but, instead, will be inherited, for potential future use, by the purchaser of Sears’s assets, ESL Investments Inc.
these assets were purchased by lampert's company, transform holdco. they are no longer with shc/shldq. lampert does not need to "reverse merge" to obtain their benefits. he already has them.
trouble in paradise. march 21 key date:
Shc closing of sale to Transform Holdco effective 12:01 AM on February 11, 2019
Transform Holdco failed to have a cash management system (CMS) in place at closing
SHC agreed to cede control of its CMS to Transform Holdco subject to Holdco agreeing to promptly reimburse SHC for “funds in transit” properly belonging to SHC
Holdco allegedly is withholding $57.5 million of “funds in transit”
Holdco allegedly stalling by filing mediation motion which could mean “funds in transit” could not be released to SHC until April at the earliest.
Holdco’s mediation motion unrelated to “funds in transit”
SHC alleges failure to turn over “funds in transit” could adversely affect its cash flow and ability to make payments which might create a condition of “administrative insolvency”
SHC asking Judge Drain to rule on this matter at Omnibus Hearing on March 21
March 21 is same date transform holdco requested judge drain’s ruling on appointing mediator
you said:
"If WINMQ drops to .05 cents we'll be able to buy 8 times as many shares as those people who paid a premium in the .40's"
_________________________________________________
however,
if the analyst's projections posted on this board were to pan out and winmq were to even hit the $3.50 range, that would be around an 11 times return at these levels. those people waiting for shares to drop to a nickel would be left holding their empty bags and waiving to a departing train.
you said:
"$SHLD will be at least $4.00 when applying to uplist off the OTCBB when the time comes. Thats the minimum criteria needed to Uplist"
buy now, a guaranteed 8 bagger!
"I take it that the blurb presented is the only one you could find to justify your theory..."
was just trying to keep it simple. liquidation value, lmao!
have a great day. back up the truck!!
The Company does not believe that there will be sufficient funds or other assets in the Estate to allow holders of the Company’s common stock to receive any distribution of value in respect of their equity interests and expects to file a chapter 11 plan memorializing that belief in the coming weeks.
guess that means the "q" is coming off and the stock is going to $42/share, or minimally it should be $5.00/share based on those warrants.
probably everyone will be loading up today. sounds like eddie is a hero.
i've given up trying to understand why flat-earthers feels threatened by facts. some of the opinions expressed might have been understandable early in this bankruptcy process. however, as additional facts become available it's curious that some dig in their heels and revert to emotions versus knowledge. if a lengthy discussion is presented with links supporting statements, the criticism is "it's wordy". when a succinct presentation is made the argument is "that's all you got?"
there's a lot of talk about due diligence. but when anyone finds it difficult to get through a half page post, i can not imagine how they are able to tackle an sec filing or a bankruptcy docket counting into the hundreds of pages. so it appears real facts are blown off and the approach is to go with one's gut. if you are that threatened by a presentation backed up with factual links, maybe you should revisit your investment thesis.
if you have facts to counter someone else's position, i would think you would be able to restate those pretty quickly. saying "i'm too busy to figure that out again" suggests to me is was never really figured out in the first place. arguing that eddie wouldn't walk away from his stock is based on emotion, not facts. i'm not the one who set the value of the class b securities. that was done in the asset purchase agreement which was mutually agreed to by and among transform holdco, sears holding corporation, and the sears subsidiaries who are parties to the bankruptcy. argue the ridiculousness of the value with them, that's what they agreed to. killing the messenger doesn't change those facts.
glta because it seems that luck may be all you have if you're not willing to consider the alternatives.
This is how Judge Drain's order and the attached exhibits to that order describe what is going to happen to "Old Sears". And by Old Sears, I mean what is left over after Sears Holdings Corporation and its debtor subsidiaries which are all parties to the bankruptcy have sold substantially all of the go-forward assets to Transform Holdco.
the "Distribution Requirement" is located on page 12 of the Asset Purchase Agreement which was attached to and approved as a result of Judge Drain's order. The Asset Purchase Agreement was also filed with the SEC. It is docket # 2507. When you get to the point about the Securities Consideration, I documented what this was in an earlier post today. The Securities Consideration is 3000 shares of Class B stock in Transform Holdco with a liquidation value of $300,000.
“Distribution Requirement” shall mean the requirement that each Seller...(i) shall distribute the Securities Consideration received by it to Persons qualifying as holders of “securities” of such Seller for purposes of section 354 of the Code, (ii) shall distribute all of the cash received pursuant to Section 3.1(a), as well as all of its other property pursuant to the Bankruptcy Plan, (iii) shall dissolve no later than the end of the third taxable year ending after the Closing Date, and (iv) during the period between the Closing Date and its dissolution, shall limit its activities to those which are merely for the purpose of liquidating its assets (which may include maintaining a going operation for the preservation of value, pending distribution or sale), winding up its affairs, resolving and paying its debts, and distributing any remaining assets (which may include a distribution to a non-corporate liquidating vehicle).
So, this is not a reorganization of debt. notice points (iii) and (iv) above. The Seller(s) are Sears Holdings Co. and each of its debtor subsidiaries who are a party to the Asset Purchase Agreement. Those Sellers are required to DISSOLVE no later than the end of the third taxable year after the Closing Date and their actions during that period of time is limited to undertaking the steps necessary to liquidate their assets, wind up their affairs and pay their debts.
I am not sure how liquidating, winding up affairs, paying debts and then dissolving can be construed as reorganizing.
The steps Sears Holdings Co. and it debtor subsidiaries are required to take in the "Distribution Requirement" set forth above are not opinions. They describe the facts of what is going to happen. If you can read that and apply any "logic" as to how those things are substantially any different that what they say, please chime in and let us know.
Again, everyone is entitled to their own opinion, but there are some pretty specific facts which run contrary to what a lot of people think is going on based on their feelings, gut reaction, emotions, or whatever.
chemist,
docket #2626 is the order to extend the exclusive period for shc to file a por.
maybe you should read judge drain's ruling because that is exactly what he did. when transform holdco's bid was approved by judge drain, it was free and clear of any liens or encumbrances. additionally as the filings show, lampert also has no liability for the two sears' pension funds because those were assumed by the pbgc.
as to the creditors, their remedy for reimbursement is through liquidating the remaining assets shc has which were not sold to transform holdco.
first in line will be the administrative costs because lawyers always find a way to be paid first.
between the first and second in line would be any super priority creditors. i believe the only super priority creditors are lampert and/or his controlled entities. isn't that surprising?
second line line would be the secured creditors who most likely will not be able to receive a 100% recovery on what they are owed.
third inline would be any unsecured creditors to the extent there is anything left over after paying the secured creditors or if there is some agreed apportionment between secured and unsecured creditors dividing what is left of the pie.
and last in line would be stockholders. regardless of any outrage expressed or felt, don't see there much of anything left for them and transform holdco has no obligation for any of the above unless specifically spelled out in the asset purchase agreement as amended.
it's important to remember here that in bankruptcy creditors can be considered as stockholders. therefore, any nol requirement which might require consideration of stockholders can be met by only including creditors. i believe that point is being lost by most.
as to feeling sorry or expressing outrage over the fact lampert lost a lot and may lose everything associated with his investment in sears stock, good luck mustering support for that.
as to sorrow for institutional investors, if they were worth their salt at all they could see this coming from a mile away and it would also be hard to muster support for them as well.
to the extent sears employees had sears stock as part of the sears pension investments and lost almost 100% of that value, not to worry. the pension benefit guarantee co. is guaranteeing 100% of pensions up to $65k per year.
i would imagine anybody scheduled to receive or anybody who is actually receiving over $65k is some type of management and one could argue they were in control when this train was being run off the tracks. so, for the majority of people, it would be hard to muster a lot of sorrow for anybody with a guaranteed $65k annual pension.
to the extent any retail investors purchased and held sears stock prior to sears' bankruptcy filing, that one might engender some general outrage and sorrow.
and lastly, anybody who bought sears stock after it filed for bankruptcy was throwing the dice and taking a chance. can't imagine any judge would have any sympathy for this group.
emotional arguments are just that, emotional. facts will control here and once they all get exposed to the sunlight we will all know how this will shake out. in the meantime, if anybody wants to play in this playground, trying to uncover and understand the facts which are already out there and then maybe even trying to connect the dots would be part of good due diligence.
raw opinion is not due diligence. i have tried to follow the documents and make an informed decision based on what i have read as i have understood that.
for me that led to my decision to sell my stock in shldq (which i purchased post bankruptcy) while still keeping an eye on things in the event my conclusion was incorrect.
the fact anybody doesn't like by conclusion doesn't mean i have some "agenda". but i do wonder about some of the agendas out there which don't appear to be based on any facts as they relate to this case.
i acknowledge i may have reached a conclusion based on incomplete facts (simply because all of the facts of this case have not been made publicly available), but the facts i have seen are what has led to my conclusion.
as the saying goes, you are entitled to your own opinion, however you are not entitled to your own set of facts. there are no alternate facts.
the invented securities you claim don't exist are spelled out in the referenced document. these are securities of a private company which is 100% owned by lampert. these could be a private placement or an unregistered offering exempt from sec registration. the fact no cusip is associated with them does not support your case.
however, if that's what you believe, then why not report it to the sec for filing a false statement?
you can put your boots in the oven, but that don't make em biscuits.
i actually do respect there can be differing opinions regarding how this will ultimately shake out. one difference between what you have opined and what i have is that my conclusion(s) have been based on posted documents, references to established tax rules and bankruptcy code.
you are entitled to your opinion but other than feelings that lampert will not abandon his shldq stock you have provided absolutely no supporting documentation.
the facts of this case are not currently aligning very well with a lot of opinions stated here.
another example of one of those recent opinions is that lampert would not walk away from the nols. the fact is that lampert purchased the tax assets (nols and tax credits) from old sears when transform holdco's $5.2 billion bid was approved by judge drain. therefore, he already has the nols and tax credits. he's not walking away from anything.
as i posted earlier, lampert's shld(q) holdings were at one time valued at $12 billion. around the time of the bankruptcy filing, his holdings were valued at around $20 MILLION.
based on friday's closing price, it would now be valued at a little under $50 MILLION.
lampert doesn't need to trade holdco shares for sears shares. he already owns everything he wanted when his $5.2 billion bid was approved by the bk court. he gains NOTHING by exchanging holdco shares for shldq shares. he owns 100% of all the assets he purchased from shc. exchanging holdco shares for shldq will not permit him to own more than the 100% he already owns.
other than p/r or elevation to sainthood, nobody has been able to cite any supporting documentation as to why he would do this. it costs him $ to do what you are suggesting and there is no cost for not doing it.
dragon,
regarding the securities issue, the following is from docket #2599, page 329/509. it describes the securities which newco (i.e. transform holdco) is providing to shc and its debtor subsidiaries for distribution.
note, sears holdings corp is NOT getting any of these securities. the securities are being distributed through the subsidiary companies.
while no cusip is identified, the securities are class b securities. they are not common securities.
as far as i can tell, these are the only securities in transform holdco which will be exchanged within the shc subsidiaries, specifically excluding shc.
and to a post from chemist, while some things have occured after the judge's approval of the sale, i still do not see any documentation that the closing has actually taken place.
again, relate this to a home purchase. if you sign a purchase agreement to buy a home, the closing usually occurs a number of weeks or months after the agreement was signed. i have been involved in three home purchases and not one of them had the closing take place at the time a contract was signed to purchase any of these homes.
and back to dragon's question, yes i do think that lampert will "walk away" from his shldq stock.
there was another question about what executive employees may have gone with lampert to transform holdco. i think the referenced article was not only poorly written but that it was wrong. as far as i have seen, only lampert and i believe kulani (not sure of the spelling) resigned and filed forms with the sec.
at any rate, docket 2599 discusses the exclusion of certain executive employees. you can find your answer there.
also notice in this docket that transform holdco is "leasing" certain shc employees during the transition period. there is also a services agreement attached as part of this docket. note that some of the things which various people have taken as "proof" that old sears has things which have actually been sold to transform, you can see it's just stuff old sears is required to continue doing until the transition is complete. among these things would be marketing (think the new line of craftsman tools)
for those who have a different opinion, that's fine. however, the only facts available about securities are set out in these bankruptcy court filings. it's not a matter of opinion that holdco is providing stock in holdco to shc to be distributed to subsidiaries, OTHER THAN SHC.
______________________________________________________________
Schedule 9.2: Securities Consideration
1. The Securities Consideration shall comprise 3,000 Class B Preferred Units of Newco, with an aggregate liquidation preference of $300,000 and otherwise subject to the terms and conditions set forth in the Amended and Restated Limited Liability Company Operating Agreement of Newco as in effect on the Closing Date and as may be amended from time to time thereafter.
2. The Securities Consideration delivered to the Sellers pursuant to Section 3.3 of the Agreement shall be allocated among the Sellers that are Debtors in accordance with the Allocation Schedule. The Allocation Schedule shall identify the amount of cash, Securities Consideration (including any fractional units) and credit bid debt that is allocable to each transfer of Acquired Assets contemplated by the Agreement (a
“Transfer”).
3. As soon as practicable after the Closing, each Seller other than SHC shall distribute the Securities Consideration received by it (whether directly in respect of a Transfer by it or pursuant to the Distribution Requirement from a direct or indirect subsidiary) to its equityholder(s) pursuant to the Distribution Requirement, subject to item 5 below.
4. As soon as practicable thereafter (and effective as of the Closing Date), SHC shall distribute the aggregate Securities Consideration received by it (whether directly in respect of a Transfer by it or pursuant to the Distribution Requirement from a direct or indirect subsidiary) ratably to holders of Senior Second Lien Obligations pursuant to the Amended and Restated Security Agreement, dated as of March 20, 2018, among SHC and certain of its Subsidiaries, as Grantors, and Wilmington Trust, National Association, as Collateral Agent, with any fractional preferred units otherwise determined for any single holder being rounded up or down to the nearest whole unit, subject to (x) item 5 below and (y) with respect to each holder, receipt of evidence reasonably satisfactory to SHC of an exemption under applicable securities Laws for the transfer of the applicable pro rata portion of the Securities Consideration to such holder.
5. In the case of any Transfer that is deferred until after the Closing, the Securities Consideration relating thereto shall be delivered pursuant to item 2 at the time of such Transfer and distributed pursuant to items 3 and 4 above as soon as practicable after such Transfer.
6. For tax purposes, all Transfers that are intended to constitute “G reorganizations” shall be deemed to take place simultaneously. The Distribution Requirement shall be satisfied sequentially, starting with the lowest-tier Seller and moving up the chain of Sellers.
dragon,
you both stated/ask this:
imo... many glanced over the obvious on your post...
_______________________________________________________
Quote:
“ESL, we know, is a ‘qualified creditor’ of Sears,” so any stock it receives as part of the deal “would count positively towards satisfaction of the bankruptcy exception,” New York-based tax consultant Robert Willens told Bloomberg Tax in an email.
The proposal not only ensures that ESL will have access to Sears’ NOLs, but that the combined company won’t be “burdened” by the limitation under Section 382, he said.
__________________________________________________________
So, this would then be... How can they make that happen?
the Answer... Reverse Merger
Eddie and ESL give up their entire holdings of common shares that they paid dearly for and still own... just to give them up? Crazy. Ain't gonna happen.
___________________________________________________________
i don't agree with your conclusion and here's why.
after this article came out i corresponded with the author and we exchanged a number of emails.
his conclusion was consistent with mine which is that the continuity of interest requirement necessary for the acquisition to qualify as a 'G' reorganization can be met if the requisite amount of stock is issued solely to selected creditors, such as lampert.
he also agreed the NOLs will be inherited by transform holdco because of 'G' reorganization.
his article summarized the "G" reorganization requirements. i have inserted in each of these requirements how they have been satisfied.
__________________________________________________________
(i) Buyer acquires substantially all of Sear's assets. (the purchase by Transform Holdco satisfies this condition), (ii) Sears liquidates in pursuance to a plan of reorganization (although a por has not been filed, and Sears has both requested and received an extension to file its por, the Asset Purchase Agreement provides for Sears to liquidate and or dissolve within three years of the Closing Date of the sale transaction), (iii) at least one Sears shareholder receives ESL stock; or at least one security holder of Sears receives ESL stock or securities. (Lampert alone will satisfy this requirement and "at least one" doesn't seem to be able to be construed to include "all").
_________________________________________________________________
when i ran the above by the author, he agreed with all of them.
now, specifically addressing the stock question, you may or may not remember that the asset purchase agreement provided that Transform Holdco was to provide a "securities consideration" to the seller.
thanks to linda1 who provided the following information which can be found in docket #2456 on page 148/155:
_________________________________________________________
All of the Class B Preferred Units of Newco received by SHC be will distributed to Holders of Senior Second Lien Obligations:
The Securities Consideration shall comprise 3,000 Class B Preferred Units of Newco, with an aggregate liquidation preference of $300,000 and otherwise subject to the terms and conditions set forth in the
Amended and Restated Limited Liability Company Operating Agreement of Newco as in effect on the Closing Date and as may be amended from time to time thereafter.
note: the newco referenced here is actually transform holdco
_______________________________________________________________
since i had posted earlier that i was always looking for loopholes whereby lampert could just be the lone stockholder receiving shares in the new company he agreed. it was his feeling the continuity of interest requirement necessary for the acquisition to qualify as a 'G' reorganization could be met if the requisite amount of stock is issued solely to selected creditors, such as lampert. he also said there's no requirement that the stock to be issued is even to be disbursed among the various classes of creditors and felt it highly likely that is the approach lampert would take. he also didn't feel lampert would want any other creditors to obtain stock in Transform.
___________________________________________________________
it's important to remember in this type of transaction that creditors will be considered as stockholders. and, since eddie is a creditor he can satisfy the "stockholder" requirement by virtue of the fact he holds debt (i.e., he's a creditor)
in one of lampert's responses it was stated that back in 2007 his stock holdings in SHC (now, shldq) was worth $12 billion. around the time of the bankruptcy filing he said it was worth around $20 million.
eddie has already "given up" most of the value he had in what is now shldq. thanks to his $5.2 billion bid for substantially all of the "go-forward" assets of shc (which included the nols and tax credits) he has gotten everything he wanted. he currently is the 100% owner of transform holdco which includes all of the assets included in the asset purchase agreement.
so, if lampert can not create sufficient income to maximize the value of those nols and tax credits by operating the "go-forward" assets he purchased, he could actually merge parts or all of transform holdco (or whatever it comes to be called) with a "profitable" company and i don't believe that would be what's left of sears.
the only reason for a "reverse merger" with old sears (i.e. shc and what's left of it currently trading as shldq) would have been to realize the benefit of the nols and tax credits. however, since lampert already has those things, a reverse merger doesn't do anything for eddie.
in the meantime while things are being sorted out (meaning before lampert might decide to "go public") he will be doing those things which he said would be distasteful to stockholders. among those things might be closing/downsizing/repurposing some/most/all of the stores he is acquiring. expect continued layoffs coming from the ranks of the 45k employees "saved" by this deal. according to the asset purchase agreement, lampert is only required to retain those employees for 1 year. he will have plenty to do in that time without creating an uproar.
in reaction to a post on this board that eddie had filed for a corporation in the name of TF Orange Park, LLC in florida, i went on to the state of delaware corporate search site. there were many LLC's set up in various "TF" names (as in transform of transform holdco). notable among them were two for TF Hoffman Estates, both LLC's. These have all been done since lampert's bid was approved by judge drain.
i would speculate that one of the Hoffman Estate LLC's if for the 2.2 million sq ft of corporate office space which lampert will be carving out as a separate company. i would further speculate the other Hoffman Estate LLC is for the 200+/- acres of undeveloped property which also will be carved out as a separate company. there are many more and probably in each of the states in which transform holdco has obtained property interests.
so, all said and done, the above is why i don't think commons will survive.
as posted today, the only fly in the ointment i see is if lampert fails to obtain a favorable tax ruling that transform holdco can utilize the nols and tax credits which he has ALREADY purchased.
if that were to happen, which i doubt, then that is the only path i see which might provide benefit to shldq shareholders. there might be some small portion of the nols and/or tax credits left with shc/shldq as a result of lampert's credit bid. but for shc/shldq to realize any benefit from them they would have had to retain a significant portion of their business which originally gave rise to those nols and tax credits. don't know what that might be since all of the "good stuff' was sold to transform holdco and the remaining assets are being liquidated to pay off creditors.
shldq is not lampert. shldq is not the assets which were purchased by transform holdco. shldq doesn not currently control the nols and tax credits. the stock in transform holdco which eddie is providing as the "securities consideration" described in the asset purchase agreement will go right back to eddie via his status as a secured creditor. public relations releases under shc/shldq are only there because shc/shldq are debtors in possession and are required to do these things until the sale transaction is closed.
remember, lampert has filed a motion requesting the judge to authorize the appointment of a mediator to mediate a number of issues lampert has alleged ALL stemming from SHC/shldq's failure to continue acting is good faith as debtor's in possession and properly protecting and securing those assets until the closing takes place.
one of those actions was the p/r associated with the new line of craftsman tools. just because that was released by shc/shldq does not mean that shc/shldq still owns the craftsman trademark or the ability to manufacture/sell the new line.
they don't! it just means that shc/shldq has to continue with "business as usual" until the closing occurs and the things which lampert purchased are actually handed over to him (transform holdco).
linda,
i really don't have an opinion about how low winmq could go. i find it most interesting how it has held in a fairly narrow range this past week.
intrigued by the docket which you have referenced on more than one occasion that assets exceed liabilities.
encouraged that creditors seem to want to work with win. further intrigued with the filing taking actions to preserve the nols which might lead one to believe win might be looking toward some kind of merger. since win has made comments about seeking to emerge fairly quickly from bk, certainly looks like they might have some plan in mind.
based on all of that i would be surprised if it were to fall below $0.20. bragging rights for buying at the absolute bottom will be shared by few i would imagine. if they are able to reorganize either through concessions with creditors or via a merger and commons stay intact, there will be plenty of upside for everybody at these levels.
if traders are unsure and flipping takes place, then the volume issue could be addressed from that standpoint alone. yes, apparently minimal float but active day traders can buy/sell providing a market for any/all who want to play whether their game is buy and hold or flip.
i've taken a small position but would like to add more and am content to see how this moves.
The purpose of windstream's docket # 719 was to permit win to preserve their tax attributes which include significant nols.
People following other bankruptcies involving nols should see this as a similar tactic. those filings established that lampert and his controlled companies were both majority shareholders before bk (as holders of shldq stock and debt) as well as after the 363 asset sale to transform holdco. transform holdco is 100% owned by lampert. since lampert satisfied the "at least one shareholder" requirement, the tax attributes of shc were able to be purchased by transform holdco as described in the asset purchase agreement.
as discussed above, the purpose of this filing is to identify any >5% owners as well as any holder who files a tax return CLAIMING the stock is worthless.
the purpose of this filing is to prevent any adverse changes in ownership of win (pre bk filing) as well as after.
one of the ways for nols to transfer in bk is for at least ONE majority shareholder (pre bk) to also be a majority shareholder in a post bk entity. also, if there are some changes of control there needs to be some continuity of proprietary interest for the nols to be transferred.
a news article subsequent to the docket filing which some have interpreted as meaning this stock is worthless IS NOT new news and the interpretation is incorrect.
post #719 addressed the nol issue in docket #5. docket #5 presented this issue almost a week before the news article. it's nothing new and it doesn't declare the common stock to be worthless.
As described in the filing, if any shareholder were to attempt to declare their holdings worthless (so long as judge drain approves this motion) win has the ability to "force" such stockholder (under terms of the bankruptcy ruling) to reverse any such action which would be detrimental to the preservation of win's tax attributes.
although the article was recent, the first line of the link states that the report of vanguard's holdings was for the 3rd quarter. that's almost 6 months ago. also note from the article that vanguard had reduced its holdings leading up to this report.
in a recent post, this was said:
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“ESL, we know, is a ‘qualified creditor’ of Sears,” so any stock it receives as part of the deal “would count positively towards satisfaction of the bankruptcy exception,” New York-based tax consultant Robert Willens told Bloomberg Tax in an email.
The proposal not only ensures that ESL will have access to Sears’ NOLs, but that the combined company won’t be “burdened” by the limitation under Section 382, he said.
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What makes anyone think the plan has changed. IMHO it has not.
SHLDQ Long and strong. GLTA"
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for the author, the "combined company" was the combination created when transform holdco purchased substantially all of the "go-forward" assets of shc.
that's the combination! it has already happened! holdco is just waiting for a private irs ruling or an opinion from his tax professionals. if expedited, that could take a couple of months. imo, that's a major reason the sale has yet to close.
the reference to a combined company is not a subtle reference to a future combination of holdco and what remains of "old sears".
actually, lampert can not get rid of his stock.
if he were to do that then he would no longer be considered the majority owner for purposes of transferring the nols from sears to holdco. he would have forfeited the "proprietary interest" provision required for the successful transfer and ability to utilize the tax assets (aka the nols and tax credits).
remember, there has to be AT LEAST ONE shareholder who was a majority shareholder in both the acquired (old sears, aka shc) as well as the acquirer (new sears, aka transform holdco) company. although the sale was approved, the closing has yet to happen.
there are filings describing the above issues.
i agree, there are probably flipping opportunities. however, the volume has dried up. best to escape before being sucked into a black hole.
how many didn't get out when the price was in the mid $2 range (me included)? as previously posted, i got out at a nice profit but i missed the opportunity to realize a really really good profit.
again, still looking for the needle in the haystack for commons to be saved but i just don't see it happening. if it were to happen, then i also don't see a 1 for 1 exchange. a really bad exchange, if it were to even occur, would leave most worse off than they are now.
if this fails as i suspect it will, look in the mirror, don't blame eddie. eddie's in it to win it. eddie will look out for eddie.
to me, the recent announcement about lampert asking the court to appoint a mediator to settle a number of matters between holdco and shc (docket filing as well as news coverage) screams an end to a bad marriage as opposed to a reconciliation.
maybe a bad analogy since shc and holdco aren't and never were married, but hopefully the comparison is not too nuanced.
yes, exactly $1 million.
bar,
actually they did reflect a $1 million impairment charge.
while that appears to be "too clean" a number, it did show up on the income statement.
as you commented, these are unaudited, but nevertheless telling.
docket 2785 posted today is a report on shc's operations for the period from january 6, 2019 through february 2, 2019.
for this most recent report, shc racked up another $500 million of losses (which will go to lampert) and their balance sheet for the period shows a deficit of over $7.5 BILLION.
included as an asset is $691 million of "goodwill". goodwill is not cash, it can't be exchanged for any of shc's liabilities, and it's hard to understand how there is much "goodwill" left with old sears. it's hard to see where they expect to make up a $7.5 billion deficit.
the value shown as "investment in subsidiaries" is more than wiped out by shc's current liabilities. to the extent these "investments in subsidiaries" can be monetized, anything received from that will just go to pay off creditors.
i don't see any way this judge is going to permit shc to withhold assets which could otherwise be used to pay off creditors so that shc might find a way to reorganize. shc has sold substantially all of its "go-forward" assests to transform holdco, the nols have been sold to transform holdco as part of transform holdco's purchase price, and as stated in the asset purchase agreement, the shldq stock was specifically excluded from anything which transform holdco purchased.
as i have posted before, it is my opinion that lampert is willing to walk away from his shldq stock. he has already publicly stated he can do things as a private company which shareholders would not endorse. if that's the way he feels then it seems likely that lampert is contemplating actions once the closing takes place which could cause stockholder blow back. why then take on the commons? he already owns 100% of transform holdco, why dilute his ownership by taking on old sears stockholders?
the income statement and balance sheet for the period certainly don't reflect any more than a hollow shell remaining for shc.
would be interested in anybody else's take on where there might be value after looking at the financial reporting shown on this docket.
still see nothing which leads me to believe there is any hope for commons to survive.
howaboot, when you say:
"We're not Sears any more. We are a shell with NOLs waiting to clean up our debt and be merged. You might as well post news about Burger King",
you are partially correct. "old sears" is a shell", however old sears no longer has the nols. they were sold to transform holdco.
still think the merger idea with lampert once old sears "cleans up its debt" is a fantasy.
docket #2768 posted yesterday is a request for "old sears" to reject en masse all of the contracts which transform holdco has already notified old sears it has no interest in assuming. the omnibus motion by old sears is requesting permission from judge drain to reject 676 contracts as individually listed in the docket.
in the filing by old sears they state the following:
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The Debtors have determined in their sound business judgment that ceasing performance under the Rejected Contracts and rejecting them would be in the best interest of the Debtors’ bankruptcy estates, because the Rejected Contracts are not necessary or beneficial to the Debtors’ ongoing remaining business as the Debtors wind down.
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not sure why old sears would be telling the judge (as well as all who read this docket) that they are winding down if they are not actually winding down. they didn't say it was necessary to "right size" in order to merge after filing a por.
regarding any contracts which old sears is not rejecting at this time, they are ones which continue to serve some interest to old sears as old sears goes through the liquidation process to pay off the debts it has remaining.
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on another matter, the stanley black & decker suit regarding the craftsman line of new tools, note stanley sued sears (transform holdco), not "old sears". "old sears" no longer owns any rights to the craftsman brand as those were sold to transform holdco.
i read the filing (sec) regarding the sale of craftsman to stanley, a deal done a couple of years ago. my recollection of that deal was that sears (now transform holdco) had a right to continue selling and some limited manufacturing rights using old vendors for a number of years after the sale.
transform holdco, to the extent it attempts to paint the craftsman products sold to stanley as somehow inferior, will probably get smacked down on that issue. i would think that transform holdco will be able to continue selling the new line of tools.
if stanley's line of craftsman is a line of crap made in china and transform holdco's new line is made in america, that seems to be a legitimate differentiation to make. however, it needs to be made without trashing stanley's line of craftsman products.
and finally, there was a docket filed yesterday in which transform holdco is asking the judge to appoint an arbitrator to mediate a dispute between transform holdco and "old sears". transform holdco is alleging that old sears is not meeting its responsibilities as a debtor in possession to do things in accordance with the asset purchase agreement.
among it complaints, transform holdco is alleging that old sears delayed payments to contractors/vendors that old sears was required to pay and instead is attempting to push off millions of dollars in liabilities to transform holdco in violation of the agreement. additionally, transform holdco is alleging that old sears inflated the accounts receivable amounts and therefore millions of dollars which transform holdco expected to receive is really just smoke and mirrors.
these aren't the types of arguments one would expect to see if these two companies were just taking care of business so that they could eventually merge.
the're not playing nice with each other.
as my last post indicated, i was going to keep an eye on anything which might cause me to change my mind about common shareholders surviving. the cut/paste below is from a filing today by one of the legal firms representing shc. they are asking the court's permission to be released from their representation of shc because all that is left for old sears to do is sell its remaining assets and distribute proceeds to creditors, resolve continuing litigation and basically go out of business:
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4. After the entry of the Sale Approval Order, and the transfer of assets from the Debtors to New Sears, the Debtors will primarily will be engaged in the resolution of creditor claims, the distribution of their remaining assets to their creditors, and the pursuit of litigation
claims. I believe that Wachtell’s services with respect to the Wachtell Matters (as defined in my previous Declaration) will no longer be useful or necessary for the conduct of the remaining portions of the Debtors’ cases. We have discussed this matter with Mohsin Meghji, the Debtors’
Chief Restructuring Officer, who has agreed that the Debtors no longer need our services. We have also discussed with Mr. Meghji the possibility that we will be asked to represent the entity that has acquired substantially all of the Debtors’ assets in certain matters, and he has consented to our doing so on the terms set forth in the Letter Agreement annexed hereto as Exhibit 1.
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they are also advising the court they will be going to work for eddie now that eddie has bought virtually all of old sears' assets.
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it's docket 2761 filed today. download it and read it for yourself. parse it anyway you wish but is doesn't seem to leave any doors open that i can see.
will still be looking for a por but i don't think one will be coming which provides any type of lifeline to common shareholders.
notice that wachtel's letter didn't say old sears was going to distribute SOME of its remaining businesses and then try to reorganize around what was left.
this just further reinforces my opinion that common shareholders are toast.
On March 4, 2019, Uniti Group Inc. (the “Company”) commenced a process to seek an amendment and limited waiver (the “Amendment”) under the Company’s credit agreement. The Amendment would, among other things, waive any default resulting from a going concern modification to the audit opinion the Company expects to receive from PricewaterhouseCoopers LLP as a result of the recent bankruptcy filing by Windstream Holdings, Inc. and all its subsidiaries. In connection with the Amendment, the Company may agree to certain restrictions under its credit agreement during the pendency of the Windstream bankruptcy, including a provision generally limiting our ability to pay future cash dividends to an amount that does not to exceed 90% of our taxable income (excluding capital gains).
For the 2018 tax year, the Company paid dividends attributable to its capital stock of approximately $435 million, and in January 2019 the Company paid a dividend attributable to its capital stock of approximately $110 million related to the 2019 tax year. Under the Amendment, the Company expects dividends attributable to its capital stock paid applicable to the 2019 tax year to be limited to approximately $250 million, and aggregate dividends paid during the upcoming four quarters to be limited to approximately $140 million.
i referenced it as a bandwidth auction but the terminology is spectrum auction. it's found in docket #41
docket #5 provides some significant detail regarding win's nols.