Sears, Lampert, Eddie Lampert discussed on Opening Arguments
There's Mnuchin is not going to give satisfactory answers here. But there's more to the story after allegedly looting Sears is assets. The Lampert controlled Sears did exactly what we said, which was declared bankruptcy in October of twenty eighteen and in bankruptcy. Then the committee for Sears had a choice, right? They could either liquidate the assets and come up with an orderly way of disposing those assets to the various creditors of Sears, or they could sell them as a package. Right. And. Here we had a dispute between what's Sears wanted to do which was sell the assets as a package, and what the creditors wanted, which was don't try just liquidate the assets and distribute about. Ultimately after litigation. There was a hearing. And the bankruptcy judge approved Sears request to sell the assets to a third party inex- change for just over five billion dollars. You wanna guess who Sears sold the assets to? Cheese. One of Gordon heart Genesis, failed companies. Or maybe one of his exist will come I dunno. They sold it to transform hold co LLC a which was a wholly-owned subsidiary of any Lampert hedge fund ESL investments, so, yes. So let let let's just bring that full circle. We have the allegations that Eddie Lampert, a quite acquired the assets of K mart, in bankruptcy, at a bargain price used Kamer. This is from two seventy three used K mart to acquire Sears instead of strengthening mart became the beneficial majority shareholders of Sears sold off all the goodies from Sears. Drove Sears into bankruptcy and then wall Sears was in bankruptcy divest themselves of their ownership in Sears formed transform hold co and. Bought back the assets of Sears, in bankruptcy for pennies on the dollar. The, the few remaining assets that Sears has were approved by bankruptcy court for sale to transform hold co a wholly owned subsidiary of. Yes, L investments that Eddie Lampert hedge fund, so yes, the guy who owned the company took it into bankruptcy. And then sold the assets to himself, this should be the most basic kind of time, he stepped down from the board. When you're. Declared bankruptcy. Wow. And that's why all of the creditors. All of the creditors said, late can't Tom. This is this is ridiculous, right? This is the this the sale is being orchestrated to benefit just one buyer to make only possible for one don't did sell them off in bankruptcy, right? And pay us that way because otherwise these insiders are going to loot all the assets. We're not gonna be left with anything I'm going, there was a contested hearing. I'm going to upload the transcript I wanna focus in on an issue because this issue is going to develop in the next couple of weeks. You will see stories about it, and remember you heard them first on opening arguments. So after the bankruptcy Sears laid up on people off, this is not surprising. In laying people off it incurred certain severance and pension obligations in. Incurred as you will, see in the transcript, sixty two million dollars in claims for severance pay. Okay. Now again, that is in, in the scope of this, not a lot of money, but those are long time Sears. Employee's that have pensions who were laid off, as a result of the bankruptcy as part of the court approved asset purchase agreement. This ESL subsidiary transform hold co company agreed that it would assume those liabilities k it is section two point three k of the contract. It is called capital letters, the severance reimbursement obligations. Those were reduced as consideration for this ESL entity to buy it to forty three million dollars. All right. So already pension ease are getting. Seventy five cents on the dollar. Right. But seventy five cents on the dollar. I guess is better than nothing. And as a result, the PBGC that is at the time, the Obama controlled PBGC signed off on the deal. Now they had previously objected, right? They an upload their objection as well..