Replies to post #19267 on Sears Holdings Corp. (fka SHLDQ)

[TigerInTheStreet]

Linda, why do you forget that lampert also needs NOLs and tax attributes. If this is just an asset sale then NOLs will not be transferred to holdco. We all have discussed the reasons why the commons will survive and you are back to arguments from day 1. Also Lampert will want sears name. This is not just an asset sale. That would be liquidation.

[dragon52]

This is where I am having a problem understanding...


7. Lampert is the majority owner of ESL which owns
Transform Holdco - which just purchased substantially
all of the Assets of Sears. ESL/Lampert could
sell all of their SHLDQ Shares right now and it would not
affect their majority ownership in Holdco.


8. The only Assets that the SHLDQ Shareholders
have an ownership interest in is what is left with
the Debtors.


Lampert and ESL own commons. So, what you are implying is that Lampert and ESL could cancel all commons and it would not make a difference to them as to the rest of the shareholders, to hell with them...

So, let's say that Lampert and ESL bought shares at $30 - $40 range... that would make it over $1.3 Bil and that is just Lampert's holdings. To say that commons would be cancelled, would simply destroy his equity holdings in the company.
To pick and choose which assets to keep or sell is one thing, he cannot do the same with common shares. What is good for the goose is good for the gander.

[jimr1717]

Bingo RIP COMMONS

[StrategyTrader]

Linda, always from the get go when company's file bk chapter 11 it is mentioned in their security filings that common would be canceled wiped out so shareholders are aware of this.

Not once it has been mentioned not before and not now in courts documents there are also many quotes from lampert maximizing shareholder value if buy out went through.

Have you not noticed it ? Why keep it secret just to screw shareholders at the end ? It does not make sense if I do not see it in black and white that common will be cancelled I'm not selling. Also till the POR which will not be known till June 12 this stock will be trading in my opinion at higher levels.

[justthefactsmam]

linda,

you are probably one of the few who might read this link although you seem to have gone down this road for your research:

http://www.willamette.com/insights_journal/11/spring_2011_10.pdf

this article and what is going on is confusing for the following reasons:

yes, esl's purchase was a 363 sale which involved the purchase of (some) shc assets as opposed to shc stock.

the linked article seemed to suggest an either/or situation. purchase assets and take whatever benefit as a buyer you can derive from that purchase and leave seller with its stock and nol's, or purchase the stock of the selling corporation and take whatever nol's apply.

BUT, if you look at the language in the apa and ammendment, it appears buyer (esl/transform holdco) is attempting to have its cake and eat it too. esl/transform holdco indicates that while buying the assets under a 363 agreement, it is also attempting to structure this as a tax reorganization.

in point 6 of your comment in which you summarized your thoughts as to what you thought was correct, you said:

"the holdco securities that the debtors received as part of the sale price will either be liquidated or distributed to creditors first and lastly shareholders"

now look at page 148/155 of docket 2456 filed yesterday which addresses the securities the debtors are to receive. it says:

"as soon as practicable after closing, each seller, other than shc, shall distribute securities consideration, pursuant to distribution requirements to its EQUITY HOLDER(S) pursuant to the distribution requirement.

lampert/esl and subs of lampert/esl beneficially own either 48.5% or 49.5% (can't remember which one it is and don't want to go back to the filing to verify, but in either case, it is less than 50% of the stock), however, as discussed in the linked article, lampert/esl and the subs also are secured creditors of the debtors.

i also read somewhere that all of the "less than 5% owners in a bankruptcy" are grouped together as one group for bk consideration. not sure how that impacts "shift in ownership" if that were true.

if, as a creditor, can esl/lampert just control holdco based on its proposed exchange of the $1.3 billion debt for holdco stock, let all commons be wiped out yet still remain in control of holdco because of the stock for debt cancellation consideration?

head is swimming, still not sure i know how this plays out.

[WebSlinger]

<< ESL/Transform Holdco picked and chose what
Assets it wanted to buy and what Liabilities it wanted to
assume - per Section 363 of the Bankruptcy Code.
This is called a 363 Sale and it left certain Assets and
Liabilities with the Debtors. >>

linda1:

Pg 5 of Doc 1730 (which includes the original APA) states:

"The Successful Bid involves the purchase of substantially all of the Assets of the Company, including..."

I understand that ESL only purchased the top 425 stores and they will be closing the rest, but besides that what do you think that they are leaving behind?