Sears Holdings Corp. (fka SHLDQ)

[rc1968]

Some more info

In reading this link

http://www.woodllp.com/Publications/Articles/ma/030301.htm

it would appear that any reduction in the liabilities by cancellation of debt it seen as income and would reduce the NOL's available so this is not good. We know the pension liability got reduced so that reduces the NOL's as far as I see it. Any other debt that gets written off would also lower the NOL's. So as you gain in one area you lose in another and increasing NOLs and decreasing debt is a worse situation (because NOLs are only 30%)

I think SHLDQ declared bankruptcy because they ran out of money to pay bills. From my personal situation we got notices each day saying we had been paid a certain amount but the money never showed up in our bank. Then the notices stopped and bankruptcy happened.

Bankruptcy would be easier to purchase the assets because you don't have creditors suing you so more hassle to do it outside of BK I think. And its an incentive to make a deal.

This isn't a buyout. In a buyout the whole company is sold/purchased. This is an asset sale. They are not the same thing and making sure you are clear on the difference is important here. Someone else mentioned a premium for shareholders in a buyout (which is true) but again this isn't a buyout.

As for the balance sheets without doing a detailed compare between the purchase agreement and the rather broad categories of the assets its hard to say but a quick look would indicate Transform got most if not all the assets listed on the balance sheet. Now that would create a loss which would increase the NOLs by $2.3B (real value of $690M) (I think) but again its worse overall.

If you had a lot of time with the info available I think someone could figure out the exact situation dollar wise. But we all have limited time so you go with a quick calculation with fudge factors for both best and worst cases to get a rough approximation of the situation. I just don't see a best case that ends with SHLDQ having anything left over.

Bottom line it doesn't add up overall to covering the liabilities that I see.

These opinions are based on the research I have done and in this and other posts I have given links to the relevant info I used. If you are short or long on this its incumbent upon yourself to educate yourself on the situation. This is not investment advice in any way. Just sharing what I have found as best I can and putting things in easier to understand terms.