Sears Holdings Corp. (fka SHLDQ)

[dragon52]

The rest of the story...

Lampert and ESL bought Sears (aka SHLD) and identified 425 profitable stores.
Lampert and ESL bought Sears because, if they did nothing, would lose their entire investment (70%) that they bought in, would quickly turn into a Chap 7 due to liquidation of all assets. Their shares would be worthless, not worth less, in other words, worth zero.
To avoid this from happening, the only alternative was to make an offer to buy out the company.
Now, again they had already identified 425 profitable stores, so what happens to the other 375+ non-profitable stores? They sell the assets and liquidate those to pay down the debt, take the NOLS and write down even more.
What is left is still SEARS, but on a smaller scale, bringing in revenue and hopefully will show a profit over time. Restructuring would be simple. Change the structure based on a smaller scale; profitable stores will show positive numbers, thereby justifying their existence; upgrade the exterior/interior to meet today’s appeal.
IMO, it will show that Lampert and ESL made an offer to buyout SHLD(Q) which would contain all stores involved, but having already identified which stores would be kept is what we are being told by the media. They had to, imo, buy the whole kit and caboodle otherwise, the deal would not go through. Once the judge publishes his findings, the legwork will begin to dismantle the profitable versus the non-profitable. Selling off those assets and pay down the debts. Yes, debt holders will have to wait but most should get what is due.
One thing I’ve learned about BKs, the amount of debts can be forgiven or reduced. Once a company emerges out of BK, it will most of the time be reorganized, therefore change their ticker symbol and CUSIP ID, showing there has been a material change in the company.
One thing is known. Lampert and ESL held commons, and therefore voting rights. Owning 70%+/- is more than huge, no one could take over the company without their say so. To say that commons will not survive is somewhat ludicrous. Why would Lampert cut his own throat? Commons have voting rights and thus, he controls the company’s actions win or lose.
So, bottom-line…
1) Commons are safe.
a. They will be exchanged for NEWCO shares
b. Should be on a 1-1 ratio, but who knows
2) 375+/- stores will be liquidated to pay down debt.
3) 425 Surviving stores will make up the “New” Sears
4) June POR to be released
5) Debtors will be paid as assets are sold off and revenue comes in

This is jmho and how I see things evolving. Sure there can be and will be changes going along the way, but again, the hard part is done…Lampert and ESL survived the biggest holocaust they ever faced.

End of Story