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would have thought holding 1mm shares and very happy would be followed by exclamation points, not question marks.
not sure you are going to see the share price appreciation your group wanted in order to be able to sell and get into the cannabis play you mentioned.
good luck, but i think you are on a sinking ship.
if there was much if any support for the SA article, it would have been reflected in the stock price these past few days.
i still believe the stock price and trading volume since i sold my shares and published my reasons more support my position than those of the longs.
the doubting thomas holders are hanging on hoping to be able to stick their hand in the wound to see for themselves.
in this case, i believe the wound is fatal and there will be no rising from the bk dead.
true, linda1, but i was commenting on the post which purported to provide a link showing current insider buying. there were no such purchases noted on that link.
i believe it was point 4 of that post under things to consider (or some such header) that one reason to currently buy winmq was based on insider buying. there is currently nothing which supports that assertion.
and i did too if you bother to go back and read the posts.
the question is how the law is going to be used and whether eric's interpretation of the law is correct.
the law providing for the utilization of nols and tax credits discusses two scenarios: (1) a stock sale (i.e. transform holdco purchases the outstanding shares of shc), or (2) an asset sale (which leaves the empty shell of the selling company behind to fend for itself).
eddie, through transform holdco, chose door #2. he purchased the "go-forward" assets of shc leaving the common stock (shldq) behind with the dregs of the company.
some of those nols will stay with shc because of the cancellation of debt provisions in the law. the remaining nols were purchased by transform holdco.
in order to use those nols and tax credits, transform holdco will need a private letter ruling from the irs which it is in the process of getting.
for shc to monetize the nols which were left behind because of the debt cancellation provisions, shc must have retained a significant portion of the assets which gave rise to the nols and tax credits in the first place. it can't do that because it sold substantially all of its go-forward assets to transform holdco. shc is an empty shell as was described in the sleeping alpha article.
eddie's plan, which is out there for all to see unfolding before their own eyes, is the purchase of SHOS stock which he doesn't already own. utilizing the "sears home and outlet stores" together with the re-purposed assets he purchased under the APA will be eddie's new company.
he neither needs nor wants the sears empty shell. buying that empty shell saddles him with the left behind debt he so carefully avoided by structuring the APA as a asset purchase.
thanks. however, there have been no reported insider trades since may 2018 and there has only been one institutional purchase since the bk filing. that was norges bank in march 2019.
care to post a readable link of current insider buying?
my guess is certainly something detrimental to charter. agree that drain, within the law, will be more sympathetic to windstream.
exciting?
interesting yet unexplained entry from current katten muchin statement:
; Review new "hot" documents from
Charter production found and forwarded by G.
Thompson
and an entry showing charter wants all it's production to be sealed:
update sealing motion to
reflect Charter request to designate all documents as
confidential
the seeking alpha article concludes:
The creditor claims will be likely be paid in Newco stock, Newco preferred stock and warrants and cash; new Sears (Transform Holdco) will be a cash cow based on the New Sears Business plan.
It is important to ignore the side noise and focus on valuation of the SHLDQ shell to Transform Holdco.
_________________________________________
when transform holdco purchased the assets, judge drain's order specifically said everything which was purchased was done so "free and clear" of any claims against those assets.
therefore, all the liability to the creditors remained with shc.
the comment about the valuation of the shldq shell to transform holdco is what the author cautions against - side noise.
transform holdco neither wants nor needs the sears shell. if eddie wanted that, he would have made a stock purchase, not an asset purchase.
eddie does need a vehicle to utilize the assets which he purchased and that is why he has made an offer to purchase "SHOS", the sears home and outlet stores. that transaction is due to close by the end of this year, i believe. additionally, it is not something loaded with a boatload of debt or other liabilities.
while the seeking alpha article posts the table showing recovery percentage for each creditor class, he has no explanation for why he thinks common shareholders would receive value given unsecured creditors are getting around 3 cents on the dollar.
before commons would receive anything, all of the creditors would have to be paid in full.
given that, it seems anything received for the nols or any of the lawsuits would be going to creditors first.
seems like anyway the pie is cut, shldq is still worthless.
while the amended plan gives no value to the nol's, the lazard letter to all interested bidders which was put out as part of the global bidding procedure instructions specifically advised all bidders to include the value of the net operating losses and tax credits as part of any bid.
the $6 billion or so of nol's will be reduced for any cancellation of debt. eddie, as part of his $5.2 billion bid, included somewhat over $1 billion of debt which he cancelled.
that leaves only the nols associated with the cancellation of debt remaining with shc.
additionally, the plan also specifically stated the nols would go to transform holdco unless transform holdco specifically rejected them which it has not done.
also, there is no provision in the plan to adjust the purchase price if transform holdco rejects some/all of the nols which it purchased.
transform holdco is waiting on a private letter ruling from the irs regarding transform holdco's ability to utilize the nols it purchased.
the seeking alpha article seems to be confusing the type of purchase which took place. it was an asset sale to transform holdco, not a stock sale. transform holdco already "gave" stock in transform holdco to shc. it was described in the plan as class b shares (3000) which were to be distributed in accordance with the plan. in a bankruptcy, creditors are considered shareholders and it was the creditors who received or will be receiving those class b shares. not the common shareholders.
the article correctly pointed out that in order for shc to utilize the nols it might retain resulting from the cancellation of debt, it must have retained a significant portion of the assets which generated those nols in the first place. that has not been done since virtually all of the go-forward assets were sold to transform holdco and those assets which shc retained have or are being sold to pay debt. shc is not a going concern so it can't monetize those tax attributes.
agree with chemist. one side is horribly wrong in the analysis of value accruing to shldq stockholders.
i've taken my position and stated my feelings the stock will become worthless and there will be no exchange of stock anywhere down the line.
am not at all persuaded by the seeking alpha article which i believe is a swiss cheese analysis full of holes.
time will tell.
Shorts are not shareholders. NADA for them
unless they cover and turn LONG.
the comment "Shorts are not shareholders. NADA for them
unless they cover and turn LONG."
suggests a misunderstanding of how shorting sears holdings corp stock "shldq" works.
when one sells short, the short shares sold are borrowed shares from your broker which you do not have in your own account. when you cover your short position, you buy shares on the open market and return them to your broker to cancel the obligation you had to return those borrowed shares.
cancelling your short position does not turn you LONG.
now here's where it gets tricky:
6.2. Purpose of the Liquidating Trust.
The Liquidating Trust shall be established pursuant to the Liquidating Trust Agreement for the sole purpose of liquidating and administering the Liquidating Trust Assets and making distributions on account thereof as provided for under the Plan in accordance with Treas. Reg. § 301.7701-4(d). The Liquidating Trust is intended to qualify as a liquidating trust pursuant to Treas. Reg. § 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business. The Liquidating Trust shall not be deemed a successor in interest of the Debtors for any purpose other than as specifically set forth herein or in the Liquidating Trust Agreement.
THINK! THINK! THINK!
even though it is stated in black and white that the trustee of the liquidating trust has no obligation to continue or engage in the conduct of a trade or business, what it must really be saying is that there are "go-forward" assets which have been very carefully hidden in the broom closets of the various "secret" assets still being retained. it will be from these "secret" assets that sears will rise again from the dead. so hold tightly to your stock, don't let any of those shorts try to steal them.
even though i searched the document for MOASS and could not find it, don't be fooled by what has been written. it's all just disinformation.
from yesterday's sec filing:
4.9. Existing SHC Equity Interests (Class 9).
(a)
Classification: Class 9 consists of Existing SHC Equity Interests.
(b)
Treatment: On the Effective Date, all Existing SHC Equity Interests shall be cancelled. Each such holder thereof shall neither receive nor retain any property of the Estate or direct interest in property of the Estate of SHC on account of such Existing SHC Equity Interest.
(c)
Voting: Class 9 is Impaired. Holders of Existing SHC Equity Interests are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, holders of Existing SHC Equity Interests are not entitled to vote to accept or reject the Plan, and the votes of such holders will not be solicited with respect to such Existing SHC Equity Interests.
THINK! THINK! THINK!
even though it does not specifically say so, despite the fact shc says shldq shares will be cancelled and will receive no interests, it's apparent to those who haven't read anything which has been filed and those who can not comprehend what is happening that:
1. eddie will jump in and save the day because of the billions he has spent,
2. eddie owns shares of shldq and he wouldn't want to screw himself, much less all of the other stakeholders, and
3. the judge doesn't want to see all of those jobs lost
so, bottom line, make sure you are thinking "out of the box" because so few can see the unseen.
when you state: "investment banker hired in support shareholders"
i'm guessing you didn't read what you posted.
unsecured creditors are not the shareholders.
hopefully you haven't taken a position based on this.
the lesson learnt by everybody else is that the commons will be burnt
thanks, linda1
linda1,
have not followed that closely, but thought this was a debtor in possession. if that is the case, would there be a trustee appointed?
agree that K&E would probably not respond to an individual.
linda1,
remember you posting the docket of the employee's letter requesting the formation of an ec, however, never saw any type of response.
so, brain fart. K&E probably kirkland and ellis
interesting entry from most recent alvarez and marsal billing statement:
4/1/2019 0.5 Review response letter to request for equity committee prepared
by K&E.
any idea if that letter was public? and, any thoughts on the K&E reference?
i watched the death of this "great" company from the inside.
am a sears pensioner.
have no illusions about that's left of this once great company and what its ultimate outcome will be.
not sure, but if they still have an optical department maybe you can get some rose colored glasses.
deadlines have come and gone and basically marking time until next scheduled hearings (whether bk or separate litigation).
possibly more transfer assignments of claims to third party factoring agents.
think eddie's shos play has until nov to close.
shldq will bob up and down some with the tide of things whether imagined or real.
when the plug is finally pulled, the swirling vortex will suck up anything remaining much like a black hole. for those hoping for an alternate reality maybe shldq will be trading somewhere out there in a parallel universe, just not this one.
they've pretty much been watching paint dry.
this from the shos annual report:
The majority of our Hometown stores are operated by our dealers and franchisees. SHO provides brand and marketing support and inventory on consignment. We initiated efforts to franchise Outlet stores in 2012, with the first stores transferred to franchisees during the 2013 fiscal year. Since the second quarter of 2015, franchising of additional Hometown and Outlet stores except to existing Company franchisees has been suspended by the Company. We pay our dealers and franchisees commissions based on their net sales of our inventory that we consign to them. We also authorize our dealers and franchisees to sell post-sale services, such as extended-service plans, for which we also pay commissions.
if eddie is successful in acquiring the remaining shares of shos, he will probably start franchising the outlet stores again.
after he monetizes and downsizes the stores he bought from shc/shldq as part of the $5.2 billion asset purchase last february and if he continues with the shos model, he will probably also franchise the downsized stores he "creates".
that way, as time goes on, eddie will not retain any of the sears "employees" who came over to him as part of the package deal for sears' assets.
look at his structure now. he doesn't have the headache/responsibility which goes along with being an employer. he's fighting in court now to avoid the severance payments he agreed to make. also, he only agreed to keep the sears employees he "took on" through the end of the 2020 fiscal year which i believe ends in february 2020.
so, eddie will, in one way or the other, get rid of the sears employees for which he is currently responsible just like he will leave behind not only his shldq common stock but all other shldq stockholders as well.
this seems to be what eddie does. for those who can't smell the coffee brewing, maybe the stronger smell of dung will get your attention.
the fat lady is singing!
the good news is there's going to be a merger. the bad news is it's not with shc/shldq.
might want to check the "shos" sec filings.
transform holdco is going to merge with sears hometown outlet. as the filing says:
The transaction will reunite Sears and Kmart with Sears Hometown, which was spun off from Sears Holdings Corporation, the former parent company of Sears and Kmart, in 2012. Having these businesses under common ownership will accelerate Transform’s strategy of growing its smaller store format by adding Sears Hometown stores. It will also expand the company’s footprint as a multi-channel business that can serve customers through a variety of shopping experiences to meet their needs, provide growth for Transform’s marquee brands, including KENMORE® and DIEHARD®, and increase opportunities for Sears Home Services and Financial Services businesses, as well as the Shop Your Way® social shopping destination and rewards program.
eddie will be able to utilize the nols and tax credits as a result of this proposed merger.
shldq will continue wallowing in the mud until it's finally put out of its misery.
the box is closing in on shldq and it will be crushed by the weight of its debt. for those who continue to hold on, make sure you get your deck chair so you have a front row seat for this titanic disaster.
be sure to check your own neurology, whatever that was supposed to mean.
monthly operating report:
http://www.kccllc.net/windstream/document/1922312190531000000000020
the way shc is going, it could be a number of years before everything is settled, but that won't change the fact that there will be no lasting value in shldq.
they do have a firm timeline in the apa which is three years from the closing of the apa. that will have to be addressed if things draw out beyond then, which seems likely it could.
yes, in bk, tax attributes (and nols are at the top of the listing of tax attributes) are reduced due to cancellation of debt.
linda1,
the disclosure statement says cancellation upon approval of the plan. however, there has been so much back and forth going on, the plan approval date seems to be getting pushed back.
"emergence from bk" to me means liquidation, wind down, and going out of business. the apa requires shc to be completely liquidated within 3 years from feb 2019.
EXCLUSION OF INCOME FROM DEBT CANCELLATION
Income resulting from the cancellation of debt (COD) is excluded from a bankrupt or insolvent corporation’s gross income for U.S. federal income tax purposes.[1] In non-bankruptcy situations, exclusion is limited to the amount of the taxpayer’s insolvency.[2] For purposes of section 108, a taxpayer is insolvent in the amount that the taxpayer’s liabilities exceed the fair market value (FMV) of the taxpayer’s assets, determined immediately before the discharge.[3]
For a company treated as a partnership for tax purposes, insolvency is determined at the partner level rather than the partnership level for purpose of excluding COD income.[4] As a result, financially stable owners of an insolvent partnership often are not able to exclude COD income realized in a workout of the partnership’s debt. In some circumstances, however, partners may benefit from a special rule allowing them to account for part of the partnership’s debt when determining their own insolvency for the purpose of applying the COD exclusion.[5]
REDUCTION OF TAX ATTRIBUTES
A corporation that excludes COD income due to either bankruptcy or insolvency is required to reduce tax attributes. Sections 108(b) and 1017 provide corresponding rules that act to reduce the taxpayer’s basis in property owned at the beginning of the year following the discharge, generally by the amounts excluded from gross income under section 108.[6]
Net operating loss (NOL) carryforwards are an attribute subject to reduction. At the same time, section 382, which operates to limit the utilization of corporate NOLs and built-in losses following an ownership change, provides certain taxpayers with favorable rules for the utilization of NOLs upon emergence from the bankruptcy proceeding.[7] As a result, understanding the consequences of the interplay between attribute reduction and the section 382 limitation is critical to taxpayers contemplating bankruptcy.
still can't find out anything about yesterday, but found this coverage leading up to it:
https://finance.yahoo.com/news/eddie-lampert-sues-sears-estate-180442850.html
not sure if it is a summary of doc 4033 or not, but it does fairly well represent esl's "grievances".
thanks for the reply.
if all in your syndicate share evenly, selling at $0.75 would yield each of you a share just under $6k.
guess no one's quality of life will be adversely impacted loosing $6k, but conversely, not a life changer either.
seems like a better bet could be made with $360k available.
hearing today around 1:30 PM, might get some insight from that.
if this gets back to $0.75, my belief is it would only be due to a gross misunderstanding about what is going to happen.
good luck. not sure i would want to be the point for a syndicate holding a million shares of shldq.
wow! getting 100 million back from new sears leaves old sears only around $6 billion short in being able to provide any value to shldq shareholders.
warning! longer than tweet length. maybe even approaching dissertation length. those who are reading challenged, please save your brain power.
https://finance.yahoo.com/news/sears-buyer-eddie-lampert-wants-201252411.html
except if they are converted to chapt 7, the most recent doc states an appointed trustee would need at least 6 months to get up to speed and completely liquidating and winding down the empty shell could take 12-18 months.
guess those who buy at these levels will not have as great a total loss as those who bought higher and are holding on to the rock around their neck while they are sinking.
docket 4060 filed this morning. exhibits to second amended joint chapt 11 plan. in EVERY exhibit discussing sears equity holders (shldq), there is NO recovery.
wonder what that really means? does no recovery mean worthless?
how can that be since eddie said best possible outcome for all stakeholders?
cold hard facts can be sobering. maybe that's why reading the sec filings and court dockets can help some get by charges of fake news.
unfortunately, this is where we are today. sears stock will become worthless. it's time to trust facts, not feelings.
appears sears agenda was to advise people that shldq stock would be worthless. many times an agenda doesn't have to mean something nefarious.
no, wouldn't agree. don't think 4034 is related to 4033.
when one document is related to another, the related document is referenced. there is no reference to 4033.
additionally, 4033 was esl's standalone adversary complaint against shc for various things, none of which had to do with superpriority claims as i recall.
one of the main complaints in 4033 was that shc was failing to sign transfer deeds/titles to 13 undeveloped parcels at the hoffman estates hq site despite clear language in the apa that shc had sold its real estate interests to transform.
additionally, there was a schedule referenced in 4033 of "excluded assets" and the undeveloped parcels were not excluded.
i commented on docket 4033 earlier and didn't feel drain would be too sympathetic to shc relative to the complaints esl was leveling against shc.
for docket 4034, based on shc's allegations, it seems like esl, cyrus, and the bank might be overreaching related to claims of asset diminution.
will be interesting to see esl's response.
while i thought shc looked bad in docket 4033, esl looks bad here. again, that based on not seeing any response from esl.
remember, when the apa was approved and became effective, eddie had not set up a cash management system for the stores and struck an agreement with shc to use shc's cash management system and banking relationships.
that turned to $hit and this has all the marking of a bad divorce.
from docket 4034:
On April 17, 2019, the Debtors filed their Disclosure Statement and Plan
(further amended on May 16, 2019). Pursuant to the Disclosure Statement Motion, the Debtors have requested a July 23, 2019 Confirmation hearing and seek to emerge from chapter 11 as soon as possible—likely in a matter of weeks following Plan Confirmation—in order to effect an orderly winddown of their estates.
doesn't seem a winddown can be construed as a reorganization