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he said STAKEHOLDERS, not shareholders:
Alternative Bid Proposal. As noted above, we have allocated very considerable value to the benefits of preserving Sears as an integrated business that would include both its retail and non-retail components. If we were required to bid on the different component assets separately, the aggregate consideration we would be prepared to offer would be significantly less than we have submitted in our Going Concern Proposal. While we strongly believe that our Going Concern Proposal will provide the best outcome for the Debtors and their creditors and other stakeholders, we also are submitting bids with respect to individual assets in the event that our Going Concern Proposal is not declared a “Qualifying Bid” and subsequently accepted. Accordingly, we are submitting bids to purchase the following assets at the following purchase prices pursuant to the Alternative Asset Purchase Agreement separately provided to Debtors’ counsel (the “Alternative APA”) solely in the event that the Going Concern Proposal is not qualified or accepted (the “Alternative Proposal”):
and as previously noted, all shareholders are stakeholders, but not all stakeholders are shareholders.
when you say:
A group of Sears creditors, including some landlords and
vendors, has been calling for the chain to shut its doors for
good, saying they will recover more money in that scenario. They
also say that suing Lampert over past deals he has done with the
company will help boost how much they recoup.
that may not happen if the judge accepts esl's proposal because it will include the following release:
Release. The proposed consideration for the release of liabilities of ESL and certain ESL-related parties as further described in the Going Concern Proposal is comprised of $35 million in cash, and the assumption of the additional liabilities of the Debtors described above.
in esl's original bid, he was going to acquire 425 stores. according to the new filing, he will be picking up another 57 stores as part of the revised proposal:
______________________________________________________________________
Acquired Assets. The Revised Proposal includes the acquisition by Buyer of additional assets that were proposed to be left with the Debtors’ estate under the Going Concern Proposal, including:
a. Approximately 57 additional real estate properties;
wee, when you posted this:
Insider Ownership:
ESL Partners, L.P.
156,380,740 (1)(2) 73.4 % (3)
JPP II, LLC
65,015,615 (4)(5) 37.3 % (6)
did you think about what it is saying?
____________________________________________________________________
that indicates they "own" 221,396,355 shares! does that bother you when numerous board posters, as well as the recent filing, say there are 109+ million shares outstanding?
how can they own more than 100% if the shares?
________________________________________________________________________
suggestions the stock is worth $40+/share based on 109+ million outstanding seems to be flawed.
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reading the recent filing indicates esl and jjp have warrants to purchase common stock within some 60 day period which hasn't been exercised yet. while i haven't seen the warrant agreement, my guess is those warrants are to be exercised at a set price, NOT current market price. while esl and jjp do have the warrants, if those warrants are to be exercised at a predetermined price (say at a price at the time the warrants were given) it is highly likely they are way way way out of the money.
however, if they are able to be exercised at current market prices, and they do in fact exercise those warrants, then there will be more than 220 million shares outstanding, NOT 109+ million
___________________________________________________________________
now, assume that esl prevails in its bid, the old shares are cancelled and new shares are authorized, old shares are exchanged for new shares, and there is an ipo to raise money by selling additional new shares, all of a sudden there is significant dilution to existing shareholders.
_____________________________________________________________________
do i care? NO. please cancel my shares, issue me new shares, float an ipo, dilute me and let the new shares trade in the $10-12 range and i will still be ecstatic.
wee said:
Here's some info I found on another case for Lampert which makes a very valid point:
"$GGP the same scenario happened there many were against Lampert debtors and creditors and was fought legally, the judge eventually sided with Lampert and the offer was accepted commons were not wiped out and many who held made tons of money selling at $29 bucks from a position of .65 cents
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lampert had nothing, repeat, NOTHING to do with the ggp case. wherever you get you dd, would suggest you do better.
had posted earlier the $ sears holdings received as a result of prior store closures (with resultant "going out of business sales") will be applied to sears holding debt and used to reduce the obligation of esl at the $1.2 billion level:
______________________________________________________________________
Assumption of Liabilities. In addition to the liabilities described in the Going Concern Proposal, Buyer proposes to assume up to $663 million in additional liabilities identified in consultation with the Debtors. This amount consists of the following, to be paid by Buyer in accordance with the Revised Asset Purchase Agreement:
a. Up to $166 million of payment obligations with respect to goods ordered by Debtors prior to the closing of the proposed transactions (but as to which goods Debtors have not yet taken delivery and title prior to closing);
b. Up to $139 million of 503(b)(9) administrative priority claims;
c. Up to $43 million of additional severance costs to be incurred by the Debtors;
d. All cure costs related to contracts to be assumed by Buyer (estimated to be up to $180 million); and
e. Up to $135 million of property taxes with respect to the properties to be acquired by Buyer.
In the event that the sum of the amounts outstanding under Debtors’ first lien ABL DIP facility and Debtors’ junior DIP facility (net of any cash available to pay down such amounts) is less than $1.2 billion at the time of closing the proposed transactions, Buyer’s obligation to assume the foregoing liabilities shall be reduced dollar-for-dollar to the extent of such shortfall, with such reduction allocated in accordance with the Revised Asset Purchase Agreement. In a schedule shared with Buyer’s representatives on January 6, 2019, the Debtors estimated cash available to pay down such outstanding amounts was $89 million.
Release. The proposed consideration for the release of liabilities of ESL and certain ESL-related parties as further described in the Going Concern Proposal is comprised of $35 million in cash, and the assumption of the additional liabilities of the Debtors described above.
Based on the foregoing and our familiarity with the business of the Debtors, we are confident that Buyer can move quickly towards the consummation of a transaction as soon as possible following the conclusion of the Auction and approval by the Court.
This Revised Proposal and the Revised Asset Purchase Agreement shall automatically terminate and be deemed withdrawn at the earlier of (i) 5:00 p.m., New York time, on January 13, 2019, if Debtors have not confirmed in writing to Buyer that an “Auction” pursuant to the Bidding Procedures will be held on January 14, 2019 at which Buyer shall be allowed to participate and (ii) 5:00 p.m., New York time, on January 16, 2019, if Debtors have not confirmed in writing to Buyer that Buyer has been selected as a “Successful Bidder” (in connection with the transaction contemplated by the Revised Proposal) pursuant to the Bidding Procedures.
As always, we remain enthusiastic about the continuation of Sears as a going concern and its future potential. We hope this letter serves as the beginning of an exciting and transformative new chapter for Sears. We are available to discuss any of the foregoing at your convenience.
maybe you have heard of adam smith. this is lampert showing his "not so invisible hand"
dark pool, the restructuring plan you address is sears holdings plan. if the esl bid is accepted and approved, then esl will submit a plan of reorganization for approval. it will be in that plan, submitted by esl, in which common stockholders will see in writing if the common shares are cancelled and worthless or if the common shares are cancelled and subsequently exchanged for shares in newco.
in any case, the current shares WILL be cancelled. the question will be if they have any value after a newco is formed, again IF the esl bid is accepted and approved.
what do you suppose is going to happen with the money sears realizes from closing around 200 stores since it filed. some owned and some leased. all with inventory and ff&e to be sold. that money just doesn't disappear.
most recent docket entry. looks like he wants to unfriend aaron.
Letter requesting to be removed from receiving electronic notices Filed by Aaron J. Scheinfield on behalf of Alliance Material Handling Corp..
this will be the type of transfer you don't want to "ach". wire it!
have you ever transferred money from one account to another? seems like it will go out of one account right away but not be reflected in the other account until next day.
a bank will really be interested in having $120 million of float overnight. maybe that is the dance.
smilin, when you say: "I noticing that in all of the Articles I'm reading so far, they use the word " stakeholders" and not "shareholders"
all shareholders are stakeholders but not all stakeholders are shareholders
dark pool, you didn't qualify your statement. you said you weren't aware of any chapter 11 common stockholders surviving the process. you were given an example. don't change the issue.
sears filed an 8k with the sec on jan 4 in which lampert's bid of dec 28th was included as an exhibit.
it would seem reasonable to believe that sears would be filing another 8k disclosing lampert's new bid as well as any other entity participating in the upcoming auction.
will be interested to see if this info becomes public before the auction date.
as long as esl puts up the $120 mil today, the reports have said there will be an auction on jan 14th.
went back through the global bidding procedure (discussing that procedure was one of the specific things discussed at the status hearing yesterday) and the following cut/paste is directly from the plan.
while the plan discusses bids being qualified i have not seen any reports that any bidders (whether for the go-forward stores and remainder of assets or for liquidating bids) have been qualified.
if there was only one qualified bid for the go-forward stores there would be no need for an auction according to the plan (although sears could conduct an auction to let the liquidating bidders pick and choose assets (including picking to bid on assets within the go-forward group of assets) and then sears (through is lawyers conducting the auction) would make a determination what bid, mix of bids, or bid packets produced the best results and then recommending accepting whatever they thought was the best deal.
since there obviously is going to be an auction, it will be interesting to see whether esl is competing against any other "real" go-forward bidders or if he is just competing with liquidators looking to pick the carcass for what's best for them.
regarding lampert putting up the money today, since he has lined up three banks for around $1 billion in cash, shouldn't be any problem getting the money and since only around $17 million is non-refundable, that seems to be lampert's only risk since deposits returned to unsuccessful bidders (excepting the $17 million).
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Lazard has been engaged as investment banker by Sears to advise on the Company’s ongoing restructuring and potential sales of its assets in one or a series of Transactions. As such, the Company has requested Lazard to solicit preliminary Indicative Bids for a Transaction to enable the Company to potentially identify one or more parties (“Interested Parties”) to be invited to proceed with a more detailed due diligence review and, thereafter, to submit a definitive offer (“Definitive Bid”) that may result in the execution of one or more binding purchase agreements with the Company (each, a “Definitive Agreement”).
While it is the Company’s preference, all else being equal, to receive a combined bid for substantially all of the Company and its assets, the Company is also soliciting Indicative Bids for less than substantially all of the Company, whether based upon a going concern or liquidation.
With respect to going concern bids, the Company is soliciting Indicative Bids for a Transaction that includes, but is not limited to, the following target businesses (each, individually, a “Target Business”) or any combination of any assets comprising one or more of the Target Businesses:
•Sears as a going concern (the contemplated go-forward retail footprint, (“Retail NewCo”),2 or Retail NewCo together with substantially all assets and component businesses of Sears, such as Sears Auto Centers, Monark, and Innovel,“Sears NewCo”);
• Sears Home Services (“SHS”), including the business unit PartsDirect (“PartsDirect”); (NOTE, THIS ASSET HAS ALREADY BEEN SOLD)
• SHS, excluding PartsDirect;
• PartsDirect (on a stand-alone basis); and/or • Any of the underlying assets with respect to the Retail NewCo or SearsNewCo on a liquidation basis.
The Company will have maximum flexibility in evaluating the Indicative Bids, including the ability to accept a single bid or multiple partial bids for any assets or combinations of assets that the Company determines to auction, at the direction of the Company’s Restructuring Committee.
With respect to liquidation bids, the Company is soliciting cash and non-cash consideration (e.g. equity, hybrid, fee, debt, or designation rights) bids for part or all of the assets underlying the proposed Retail NewCo footprint and/or Sears NewCo as part of this process.
Auctions may include open bidding in the presence of all other Qualified Bidders. All Qualified Bidders shall have the right to submit additional bids and make modifications to their proposed agreements at an Auction to improve their bids, including by bidding on additional Assets not included in their original Qualified Bid.
The Debtors may, in their reasonable business judgment, and in consultation with the Consultation Parties, negotiate with any and all Qualified Bidders participating in an Auction.
dark pool, you said: "Haven’t seen a BK restructure plan that doesn’t wipe out commons yet. I’m speaking from experience. We will are find out in a short time."
guess you never looked at the restructure plan (i.e. the plan of reorganization) submitted by general growth properties which didn't wipe out the commons and which did in fact exchange the cancelled shares of the bankrupt ggp for shares of the reorganized ggp.
volume and price spiking!
thanks, that now makes sense.
what is document 1568? you commented there were 8 filings today and since all documents seem to be run through "prime clerk" and they show now new documents filed today, i don't understand the comment "there were 8 dockets filed today". if you are saying that document 1568 is really docket # 1568 that would mean over 50 documents filed today and i just don't see it on the site.
i read your words but what are you saying?
last docket i see is #1509 filed yesterday
odd, prime clerk shows no filings this morning
volume doesn't seem to be running so apparently no news (one way or the other) out of the court room yet. this doesn't appear to have been or be a closed hearing so there will be some information about what was said today i would imagine.
re: today's status hearing (cut and paste from the docket) i looked at the docket yesterday and this particular number was pulled and when it when back up it had changed to the following:
_____________________________________________________________________
NOTICE OF AGENDA FOR HEARING ON JANUARY 8, 2019 AT 10:00 A.M.
Location of Hearing: United States Bankruptcy Court for the Southern District of New York, before the Honorable Robert D. Drain, United States Bankruptcy Judge, 300 Quarropas Street, White Plains, New York 10601
I. STATUS CONFERENCE:
1. Debtors’ Motion for Approval of Global Bidding Procedures [ECF No. 429]
Related Documents:
A. Order Approving Global Bidding Procedures and Granting Related
Relief [ECF No. 816]
B. Notice of Filing of Global Bidding Procedures Process Letter
[ECF No. 862]
Status: This matter is going forward solely as a status conference.
Dated: January 7, 2019
____________________________________________________________________
find these topics (a) and (b) interesting. the global bidding procedure has already been approved (docket #862). maybe, since the global bidding procedure discussed as well as authorized a credit bid and that language was approved by the judge, there is going to be some discussion regarding the credit bid component of esl's bid.
read through the posts since i was last on yesterday and am most curious about the posts regarding the liquidator's pulling back from their proposals.
would love to be a fly on the wall in that court room this morning. as someone posted yesterday, paying attention to the trading volume and price direction probably starting around 10:30 might be instructive.
status hearings don't produce verdicts. this is to update the judge re: what is going on. there might be direction given by judge drain indicating where he might come down but don't expect anything definitive tomorrow.
status hearings don't result in verdicts. this is to update judge drain re: what is going on. judge might comment on what he thinks still needs to be done or not, but don't really expect anything definitive coming out of the hearing re: a "verdict".
can't disagree with what you said, but what i asked was do you know who currently is invested with esl?
when you say "BOA and a couple other banks according to the article I posted earlier" those are just the banks who have agreed to put up money for lampert's bid. that's not the same thing as being an investor in esl.
at this value for esl, i wonder if eddie has any investors other than family. last time i was able to see anything, he had lost a significant amount of investors including soros, michael dell, and rainwater (his original seed money.
can you shed any light on who might be left?
applies to his seritage holdings. but this could be what is in store of the sears/kmart stores down the road if esl gets the bid.
https://www.breakingviews.com/considered-view/warren-buffett-finds-value-in-sears-wreckage/
prepare to be disappointed. first we have to know whether or not esl's bid gets qualified. after that, it will have to be approved by the judge. if approved by the judge, the transaction will have to take place. there will need to be some plan of reorganization presented. if/when approved there will most likely be an sec filing for stock in newco. existing shldq stock will be cancelled. and maybe then we will find out whether or not shldq stock gets any exchange for stock in newco. the process will take weeks but most likely months. so long as there is no definitive announcement concerning existing shareholders the stock will trade based on rumors, leaked news, speculation or whatever.
the backup plan is one cog of the liquidation scenario. that is a plan in which commons will be liquidated as well. worthless. only hope for commons is if esl/lampert prevail with their bid for a going concern. remember, that is a hope, not a certainty.
the backup plan is one cog of the liquidation scenario. that is a plan in which commons will be liquidated as well. worthless. only hope for commons is if esl/lampert prevail with their bid for a going concern. remember, that is a hope, not a certainty.
"You tear down the bad malls, you often have valuable land for other purposes"
instead of "tearing down the bad malls", didn't seritage do something like that with a number of their "bad" sears stores and repurpose them for other, more valuable uses?
no different that what els/lampert will most likely plan to do if their "going concern" bid is qualified and accepted, regardless of whether or not commons are saved in some way.
since we may not hear anything until after the status conference on tuesday, the following link (univ of chi booth school of business) describes the ggp bk in some good detail. starting on page 62 or so with the table of various parties of interest, including common shareholders, is a description of the challenges they faced.
including things such as competing bids, creditors clamoring for liquidation, payments to keep key employees during the process, removal of various executives at the top, warrants, etc.
for those who like to play in the bk field this is an instructive read of the process for one company which entered the dark tunnel of bk but emerged on the other side.
although i left before the sale, i worked for the the real estate development arm of sears which was sold to ggp.
http://faculty.chicagobooth.edu/joseph.pagliari/files/IS/GGPCaseStudy.pdf