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i have looked it up. i believe i understand it. have posted many time about it. the sale to transform holdco was structured as a tax reorganization and transform holdco purchased the tax attributes.
while transform holdco will most like need a favorable tax ruling (irs private letter ruling) that doesn't change the fact holdco purchased those assets.
if they fail to get a favorable ruling, that doesn't mean shldq can use them. shldq has nothing around which to reorganize and they have not kept a significant portion of the assets which gave rise to the tax assets since substantially all of shldq's go forward assets were sold to holdco.
asset based loan facility
rc,
everyone needs to look at docket 3134 posted today and look at the footnote describing what a wind down is. described in the various cases cited to be the selling of substantially all of a company's assets and then liquidation of the remainder in preparation for going out of business.
also notice that lampert is alleging that shldq is selling off its assets and then using those proceeds to pay administrative costs in violation of the dip abl financing agreement.
all in all, not a pretty picture for shldq holders of common stock.
from yesterday's wall street journal.
"Sears Holdings spun off Sears Hometown and Outlet Stores in 2012 as a separate entity and mainly sells home appliances, lawn and garden equipment.
Sears Holdings Corp. which owned (notice, it doesn't say owns) Sears and Kmart, filed for bankruptcy protection in October and closed hundreds of stores. In February, a bankruptcy judge approved a plan to sell its remaining stores and other assets to a new company controlled by Mr. Lampert."
wow! go figure. shldq doesn't seem to own anything. but what does the wall street journal know?
look out, it could be eddie's leg and that probably won't be rain you're feeling.
yes bigmoneyyyyyyyy, you are correct. as noted in 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.
that's right, eddie will inherit them, NOT shldq!
this stock is moving on news which has nothing to do with shldq.
how do you explain the sec filing where sears holdings corporation states its stock will have no value and a soon to be released por will provide details on that?
or you could think of it this way. if you know a tsunami is approaching you would want to remove any valuable assets which were in the way of the oncoming flood waters.
eddie did that by buying substantially all of the go forward assets of sears holding corporation and certain of its subsidiaries and taking them to a safer place (his transform holdco property) thereby leaving nothing but trash to be washed away in the oncoming flood.
eddie, by purchasing substantially all of the go forward assets has in fact "cleaned" the house.
since the property was devastated, it makes no financial sense to renovate "in place" so he just is going to purchase a "new piece of land" (possibly sears hometown and outlet stores) and will just rebuild on that base.
because the house was completely destroyed and is covered in environmental waste, there is no financially viable way to put everything back in place to be livable once again.
think of the debt and administrative costs as an environmental waste area that would cost 100 times the "value" of what's left in order to stay in the same place (think "reverse merger").
hope that helps. GLTY because luck is about the only thing which would make shldq a viable long term hold.
yes eddie does own shldq shares. if you had read any of my posts on that topic you would know i already know that.
what i have said about that is eddie will walk away from those shares and i have provided my reasoning why. while you may not agree with my reasoning, you have provided no rational explanation why you think eddie needs his shldq shares.
those shares are a liability to him if he were to buy "all" of the outstanding shldq shares which he does not already own.
in order to utilize the nols and tax credits (while he needs a favorable irs ruling which i think he will probably get) he can not alter the share ownership structure which he had prior to the bankruptcy filing. and, for the nols and tax credits to be used, there only needs to be ONE majority shareholder who receives shares in exchange from holdco.
if you had read the asset purchase agreement and its amendment, you would already know that he has provided for the exchange of holdco shares via the class b shares which were part of his $5.2 billion purchase consideration.
your problem is you can't defend your position with any facts. i understand why that might be frustrating for you but that's apparently the case.
yes they are in restructuring. but, that involves selling all of their assets, winding down and liquidating.
it's kind of hard to restructure an empty shell.
the judge has already "allowed that to happen"
he approved the sale of sears' assets to eddie which included the nols
his order included the sale to eddie was free and clear of debt and liens
he warned shldq it was in danger of becoming administratively insolvent
he ordered shldq to wind down and liquidate within 3 years from 2/11/19
please provide ANY link dated after the sale and approval on february 11 which discusses the restructuring plans and what they are.
so far, you have only linked a sears holdings dot com site was has nothing about restructuring dated after october 2018.
restructuring is your fantasy, not mine.
i have provided factual links to what i have said, you have not.
why is that?
eddie's already gotten as much out of shldq as possible. he bought substantially all of the assets, he acquired the tax benefits, he left shldq holding the bag for all of the debt, he spun off a lot of valuable assets into separate entities while he was in control of shldq (such as lands end, seritage, sears hometown and outlet stores, craftsman tools) and those spin offs are not in bankruptcy.
and no, everyone does not seem to know the offer is for shos. look at board comments suggesting this means shldq is being bought out for the shos offer amount.
two minutes of dd would show the fantasy of that.
most probably misplaced hope that eddie's offer to buy the remaining shos stock he doesn't already own portends something good for shldq holders.
however, the speculation/prognostication that eddie, through transform holdco, would purchase another company and then merge what transform holdco bought from sears holdings corporation and certain of its subsidiaries is most probably correct, but why does that give hope to shldq shareholders?
shos is a company which operates sears hometown and outlet stores. these are small footprint stores selling mainly hardgoods. that's eddie's plan for the future. he already owns almost 50% of the shos stock and it would seem to make sense to buy the rest of it and make shos a private company.
over 95% of the shos franchise operations are owned/leased by the franchise operators/owners. not much outside personnel overhead involved for eddie and probably no debt. if he can take shos private, then he has the luxury of doing what he wants with the big box sears and kmart stores he purchased and still entertain the notion of an ipo 3-5 years out.
for purposes of the nols, shos has been losing money. typically you would want a money making operation to use the nols to shield income. that, at this juncture, is not the case with shos.
however, with some certainty going forward, shos could become profitable and be a vehicle to utilize the nols.
that said and done, if eddie is successful in the shos buyout, why does he need to "save" the shldq commons?
shos is not saddled with unmanageable debt and shldq is. shos doesn't have to go through any kind of reorganization to get to where eddie says he wants to go. they are already a small footprint hard goods retailer.
shldq still faces 2-3 years of wind down and liquidation in bankruptcy or worst case they could be declared administratively insolvent and be thrown to the wolves to fight it out without the protection of bk court.
why would eddie want to jump back into that?
eddie's shldq stock is only worth around $50 million. doesn't make any difference what he paid for it, it not worth that now and imo eddie will just cut bait and run from his shldq stock and leave others high and dry.
as i have said before, this will probably provide some opportunity to flip shares but i just can not see any scenario where shldq commons will be worth anything in the long run.
as someone else on the board says, plan your trade and trade you plan.
unfortunately, the author was writing the book for transform holdco, not shldq.
https://news.bloomberglaw.com/bankruptcy-law/new-sears-exits-bankruptcy-with-most-of-its-old-executive-team-1
possibly toward a trading halt so that sears (shldq) can clairfy through a filing the difference between what shldq owns/controls and what transform holdco owns/controls. if this stock moved up 17% today on the news of eddie's $2.75 offer to purchase all of the outstanding shares of "shos" which he does not already own/control, then there is clearly a very basic misunderstanding and general confusion regarding what is going on. a prior post by rc1968, i believe, stated he had contacted sears and they realized the problem being caused with general references to the sears name without any specificity as to what that meant. in the case of today's buyout offer, sears hometown stores and outlet stores have been given the right to use the sears name. of the approximately 725 sears hometown stores involved, individual franchise owners own the stores and/or real estate outright. they are only using the sears name in accordance with their agreement. lampert assumed that arrangement and extended the agreement to run through 2023 i think. so, to summarize, if today's run up in price had anything to do with the stock buyout offer, it's a smoke and mirrors move.
why would anyone think it is ok for anyone posting on this board to suggest that judge drain could order the sale of sears hometown and outlet stores stock?
anyone making such a suggestion is either woefully misinformed and needs to understand what's going on or is devious and attempting to pump up shldq by referencing a situation which has absolutely nothing to do with shldq.
it's not any more difficult that to go onto the prime clerk site home page and scroll down to the bottom of that page and hit the link for debtors to clearly see that sears hometown and outlet stores are not a part of this bankruptcy.
since sears hometown and outlet stores are not part of the bankruptcy, judge drain won't have anything to say about whether or not shos agrees to recommend any offer from eddie.
yes, i agree. it seems to be the ignorant who ignore the facts. thank you for pointing that out.
always find it interesting that someone wants to ignore the facts.
vilhelm,
if you are on this board, presumably the stock you own is "shldq".
the stock lampert is offering to buy is "shos"
they are different stocks and one has nothing to do with the other.
regarding the recent shos announcement:
The retailer said that a special committee of independent directors concluded, after a review, that a transaction on the terms contemplated by the proposal wouldn’t be in the best interests of the company’s unaffiliated stockholders.
and, from the most recent 8k:
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.
it's big news for eddie and shos shareholders.
eddie and his entities already own almost 60% of the stock of shos
shos was spun off from sears holdings (which trades under the symbol shldq)
shldq has no relationship with shos
shldq shareholders will get no benefit from this deal
look at the other major holders of shos. shldq is not one of them
this is just eddie moving to expand on the little empire he purchased from shldq
if he is successful in obtaining the remaining outstanding shares of shos which he doesn't already own, then shos will just become another privately controlled company which is 100% owned by eddie.
don't get confused. shos has nothing to do with shldq
open up your apple link and click on the announced store closings.
around the time sears entered bankruptcy they had just under 700 stores. they announced 142 store closures in october, 40 more in november, and yet another 80 in december. that took them down to the 425 stores they sold to transform holdco.
again, looking at the link you posted, notice the pr stating they sold substantially all of their assets to transform holdco.
the "financial restructuring" is and has been nothing more than monetizing (selling) their stores so that they could realize whatever money they could to pay their administrative costs associated with bankruptcy, and pay pennies on the dollar to their creditors leaving nothing for holders of shldq.
i'f afraid instead of MOASS, it's going to be YOASS.
those apples are rotten.
notice the copyright at the bottom of the page "2018"
this was written at the time shldq was entering bankruptcy and at that time they were hopeful for a restructuring. that's all water under the dam now.
substantially all of their assets were sold to transform holdco which is a private company and has nothing to do with shldq.
their "restructuring" plans were so encouraging that the pension benefit guarantee board stepped in and took over both of shldq's pension plans.
things are going so spectacularly that the life insurance benefits of sears retirees were cancelled.
the majority of shldq remaining employees are now working for transform holdco either in the stores (as continued employees) until such time as eddie either closes or reduces their size significantly or as management employees (under the temporary services agreement) until such time as the transition to transform holdco is complete.
best check the barrel because i fear most of the apples have worms.
and, whatever assets remain with sears holding corporation trading under the symbol shldq will be sold to pay off debt.
actually a $5.2 billion deal to buy the sears assets under the name transform holdco and leave sears holding corporation an empty shell whose stock trades under the symbol shldq.
those 425 stores, as can also be seen from this article, were sold to transform holdco and do not remain with "old sears" trading under the symbol shldq
https://www.cnbc.com/2019/04/04/sears-after-going-bankrupt-is-opening-new-stores-for-home-goods.html
After filing for bankruptcy, Sears is now referred to as “Transform Holdco,” until it announces a new name for the company, and it has 220 Sears and 205 Kmart stores remaining open. Eddie Lampert no longer holds the CEO role but has remained on as chairman, after his $5.2 billion deal to save Sears using his hedge fund, ESL Investments, was approved.
well, i understand the nature of some of the misunderstanding.
the 425 stores were sold BY shldq TO transform holdco.
it's eddie's company, transform holdco, which now owns those 425 stores, together with the sears name, sears intellectual property, various sears warehouses, die hard, select sears auto centers, the right to manufacture craftsman tools (despite the fact craftsman was sold to stanley black and decker), sears corporate headquarters, and a whole bunch of other stuff.
shldq is a stock symbol. the underlying assets associated with shldq would only be those assets which sears holding corporation and its various debtor subsidiaries retained.
but the bummer about those assets are they are the stores which sears had previously closed or had announced they were closing. those assets are being sold to pay down shldq's debt. and in fact, some of those stores which were closed and which had gobs were purchased by transform holdco and will be or have been handed over to transform holdco by shldq once the inventory and fixtures are sold and removed.
if you go back and look at judge drain's order, you will see that all of assets purchased by transform holdco (including those 425 stores you mistakenly think are still associated with shldq) were sold to transform holdco free and clear of all debt and liens.
the debt and liens remained with shldq. shldq does not have enough remaining assets to sell and satisfy its debt, much less any assets of value around which it might reorganize.
if anyone is invested in shldq and is under the assumption that shldq owns those 425 stores plus other assets of value, please, please, please go back and spend a little bit of time to read judge drain's order, the asset purchase agreement, and the first amendment to the asset purchase agreement.
the recent announcement about "sears" opening three downsized stores pertain to eddie's plan to downsize the stores he has purchased through transform holdco (those 425 stores). those stores have absolutely nothing to do with shldq.
eddie spend $5.2 billion to acquire those assets free and clear of debt and liens. he is more than willing to walk away from the 50 million +/- shares of shldq he holds (worth less than $40 million now). he's NOT going to reverse merge with shldq and reacquire billions of dollars in debt for which he would then become liable in order to "save" $40 million of shldq stock.
it's not worth it to him and imo that stock is worthless as a long term hold.
one last point, the nols went with transform holdco. they were not retained by shldq. if transform holdco can not get a favorable irs ruling and IF those nols were somehow to revert to shldq, in order for shldq to utilize them they would have had to retain a significant portion of their business which gave rise to the nols in the first place.
since shldq sold substantially all of those assets to transform holdco, the nols would be virtually worthless to shldq.
p.s. when/if you look at the asset purchase agreement, pay attention to the "distribution section". (it might be around section 4.3, but it is searchable if that is not it).
in that section, shldq is REQUIRED to wind down and liquidate within three taxable years after the closing date of february 11, 2019.
while i think that is a nothing burger, please explain where's the beef.
the asset purchase agreement, including its first amendment, described in detail what was sold to transform holdco.
so, can you please describe the above par assets around which a restructuring will occur?
it is a known what assets were sold to transform holdco. it is a known which stores are being liquidated via the gob's and then sold to satisfy debt. what's left over should therefore be a known quantity which you should readily be able to identify.
and, what is the source of funds to open newly profitable stores with an altogether different mindset in place for longevity?
can't see how the existing creditors would allow shldq to squirrel away any money thereby avoiding satisfying the debts which are owed.
thanks in advance.
since i'm having a hard time understanding it, please explain how the shldq restructuring plan is going to work.
thanks in advance.
yeah, probably should have been stategery. oh for spell check.
it's not like judge drain has been speaking in parables. he approved a 363 asset sale of sears holdings corporation and sears subsidiaries assets to lampert's transform holdco free and clear of any debts.
that left sears holdings corporation and sears subsidiaries holding only those assets it was going to sell to pay off creditors after the various going out of business sales were conducted as well as all of the debt.
yes, shldq is still trading but that has nothing to do with the "sears" that lampert purchased.
Yet to this day, many appear to not have a mind to understand, eyes to see, or ears to hear. there's really no "reading between the lines". it's all very plainly spelled out in the various bankruptcy filings.
when those documents and the judge's order plainly state that sears holdings corporation and its debtor subsidiaries are to wind down and liquidate within three taxable years of the closing (february 11, 2019) there is no "between the lines" there.
while flipping for dollars is possible, a buy and hold strategy would appear to be a flat-line stragegy.
is it too premature?
you posted that anavex spent just under $1 million on preclinical investigation last year.
based on a patient population of probably under 100k in the specific orphan designated space for 3-71, there is no way there could be a phase 3 mounted with any significant "n" participants in such a trial.
a phase 1 testing for safety and dosing could easily become a phase 1/2 with progression to marketability without the financial burden of a p3.
thought that was a major benefit of orphan status.
so yes, need to get a phase 1 started but isn't that what you were suggesting was getting ready to take place based on the preclinical $ being spent?
would positive results in a smaller trial allow 3-71 to be marketed based on its orphan drug designation with a concurrent p4 to prove it out?
on the cautionary side of things, the annual report also says this:
We are party to an exclusive license agreement with Life Science Research Israel Ltd., with respect to certain in-licensed intellectual property related to our ANAVEX®3-71 product candidate, and we may need to obtain additional licenses from others in the future. Our license agreement with Life Science Research Israel Ltd. imposes, and we expect that future license agreements will impose, various development, diligence, commercialization, and other obligations on us. In spite of our efforts, our licensors might conclude that we have materially breached our obligations under such license agreements and might therefore terminate the license agreements, thereby removing or limiting our ability to develop and commercialize products and technology covered by these license agreements. If these in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to ours and we may be required to cease our development and commercialization of ANAVEX®3-71 or other product candidates covered by any such future licenses. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
actually, it has not been a restructuring for the purpose of having "old sears" (shc and its debtor subsidaries) be able to emerge as a stronger company.
the "restructuring" involved a sale of substantially all of its assets to a completely different company to do with them what they wanted while leaving the "restructured" company as nothing more than an empty shell holding a lot of debt they can't pay.
using your analogy, the son actually threw his mother under the bus.
it's really that simple.
whomever wrote that article is as misinformed as those who think shldq is what eddie bought for $5.2 billion.
the article said sears emerged from bankruptcy in february. REALLY?
if that were the case, then why is shc and its debtor subsidiaries (trading under the symbol shldq) still having bankruptcy hearings in judge drain's courtroom?
if they were in fact out of bankruptcy the case would have been dismissed. anybody get that memo? no, didn't think so.
also, if you read what eddie said he was going to do with the sears stores he purchased through transform holdco, it was to significantly downsize the footprint of the existing stores. that's what this article indicates he is doing.
debt is a liability.
net operating loses are a deferred asset.
net operating loses are NOT the debt. LOL
sears holding company and its debtor subsidiaries currently trade as shldq.
that has nothing to do with eddie lampert's purchase of substantially all of the assets of shc, its debtor subsidiaries, as well as some other assets not included in the bankruptcy.
eddie's holding company might be purchasing or merging with a profitable company to utilize the nols and tax credits which he purchased but that will not have anything to do with shldq.
the restriction is for 180 days. there is an automatic conversion after 24 months if "other" things don't happen.