October 16, 2019
Latest News

Bankruptcy judge says he will approve Lampert purchase of Sears

Bangkok Desk, Feb 8 (efe-epa).- A bankruptcy judge said Thursday he would approve Edward Lampert's bid to purchase SearsHoldings Corp., a decision that will keep the doors open at more than 400 stores and see 45,000 people keep their jobs, Dow Jones Newswires reported in an article made available to Efe.

Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said he would sign off on Mr. Lampert's $5.2 billion offer to purchase the retailer despite opposition from a number of the company's creditors, including its big landlords. Lawyers for those creditors had spent the past several days poking holes in Mr. Lampert's bid and arguing he would have trouble keeping the company afloat even if the sale was approved.

But Judge Drain in court Thursday said the Sears chairman and his hedge fund, ESL Investments, have a credible plan to keep 425 stores open immediately, and that the sale marks an opportunity for Sears to better communicate with its vendors and employees.

Mr. Lampert, who combined Sears and rival Kmart in 2005 and recently served as the company's chief executive before leaving that role as part of the bankruptcy filing, has fought since the outset of the bankruptcy to keep control of Sears.

"During the course of this case, Mr. Lampert, particularly, and ESL, generally, have been the subject to substantial verbal abuse," Judge Drain said at the end of Thursday's hearing. "He is a wealthy individual and a big boy, and I guess he can take it."

The billionaire hedge-fund manager emerged with control of Sears after a dayslong auction last month. By sweetening his bid at the last minute, he was able to trump a plan by some creditors to liquidate the unprofitable company and close all its remaining stores.

His bid for Sears got a boost Thursday when the company's bankruptcy lawyer to the court said that the Pension Benefit Guaranty Corp. had resolved its $1.7 billion claim against the company and would back Mr. Lampert's proposal to buy hundreds of stores out of bankruptcy. The government pension insurer, which was Sears's largest unsecured creditor, is taking over the company's underfunded pension plans.

Although Mr. Lampert emerges from Sears's bankruptcy with the remains of his retail empire intact, the hedge-fund manager still faces creditors' lawsuits regarding past transactions he oversaw at the company, including the spinoffs of Sears's Lands' End business and some of the retailer's best properties to real-estate investment trust Seritage Growth Properties.

Sears's creditors claim Mr. Lampert and ESL deployed a dizzying series of stock buybacks, spinoffs and dividends to rake in billions of dollars while stripping the 126-year-old company of assets and cash.

Mr. Lampert has repeatedly denied accusations that he steered Sears into ruin for his own benefit. When he made money selling off the company's real estate and businesses, so did other shareholders, he has said.

Mr. Lampert, who is also Sears's largest creditor and biggest shareholder, will own all its real estate and hold on to the Kenmore and DieHard brands.

What remains to be seen is whether Mr. Lampert's victory is also a victory for Sears itself. The deal will keep open hundreds of stores and preserve jobs, but the company has left open the possibility that it may need to close more stores and cut more jobs in the future.

More broadly, a postbankruptcy Sears must learn to navigate a rapidly changing industry that it once dominated. The department store chain continues to lose money and lacks the scale to compete effectively with Amazon.com Inc. and Walmart Inc., analysts and executives say.

Some retailers, such as Mattress Firm Inc. and Payless ShoeSource Inc., have emerged from bankruptcy after shedding debt and shutting hundreds of stores. Others, such as Toys "R" Us and RadioShack, have disappeared. Still others, including Gymboree Group Inc. and Wet Seal Inc., emerged only to wind up back under court protection.

"The judge was swayed by the 'save jobs' argument," said Erik Gordon, a professor at the University of Michigan's Ross School of Business. "But I think the judge is as unrealistically hopeful as Eddie Lampert. Usually a new management team is brought in [after a bankruptcy], but this has been Eddie for years and it's still going to be Eddie after this."

By Lillian Rizzo

News history
Tesla stock has risen this month as its 3rd-quarter numbers approach

By David Marino-Nachison

Australian Navy begins sea trials of 3rd air warfare destroyer

Sydney, Australia, Sep 16 (efe-epa).- Australia has begun the first phase of sea trials of its third and final Air Warfare Destroyer, the Department of...

Nissan Motor CEO steps down in the wake of bonus scandal

Tokyo, Sep 16 (efe-epa).- Hiroto Saikawa stepped down from his post as chief executive officer of Nissan Motor on Monday and has been replaced by Yasuhiro...

Trump says US is "locked and loaded" to respond to attack on Saudi oil

Washington DC, Sep 15 (efe-epa).- The president of the United States on Sunday warned that his administration was "locked and loaded" to respond to a recent...

Nissan CEO steps down over bonus scandal

Tokyo, Sep 9 (efe-epa).- Nissan Motor's CEO, Hiroto Saikawa, will step down on 16 September on the back of an investigation into over payments the executive...

Volkswagen to pay multi-million-dollar settlement over 'dieselgate' Australia

Sydney, Australia, Sep 16 (efe-epa).- German car giant Volkswagen has agreed to pay millions in compensation to those affected by its diesel emissions...

General Motors braces for first nationwide strike in 12 years

Washington DC, Sep 15 (efe-epa).- The United Automobile Workers trade union on Sunday called for a nationwide strike of 48,000 employees at General Motors,...

Mexico seeks to topple Brazil's Volkswagen Guinness World Record

Puebla, Mexico, Sep 15 (efe-epa).- The Mexican state of Puebla over the weekend attempted to take the Guinness World Record for the most Volkswagen vehicles...

Argentina's gov't to present new budget amid economic woes

Buenos Aires, Sep 15 (EFE).- Finance Minister Hernan Lacunza will present the proposed 2020 budget to the Argentine Congress this week, a budget that will...

World's biggest oil producer reduces output by 50 percent after Saudi attacks

By Suleiman al-Assad

Battle to power electric vehicles reaches Sweden

By William Boston

Are central banks losing their clout?

By Randall W Forsyth

Ecotourism, the answer to Latin America's rural development needs

By Maria Jose Brenes

Havana-based cigar maker says it doesn't foresee Helms-Burton lawsuits

Havana, Sep 13 (efe-epa).- Habanos S.A., a Spanish-Cuban joint venture that is a leading maker of Premium cigars, said Friday it does not believe it is at...

US pledges to increase trade with Brazil, without mentioning bilateral deal

Washington, Sep 13 (efe-epa).- US Secretary of State Mike Pompeo promised his Brazilian counterpart here Friday that exchanges of goods and services between...

Mexicans make drinking straws from reeds to curb use of plastic

Jose de Jesus Cortes

London, Sep 13 (EFE).- The London Design Festival returns this weekend to the British capital with events and facilities bringing together the best of the...

China exempts US soy, pork products from tariffs ahead of US negotiations

By Paula Escalada Medrano.

Vaping giant Juul Labs debates pushing back on US' new ban on e-cigarettes

By Jennifer Maloney

Trump's plans for oil drilling in Arctic refuge clear big hurdle

By Timothy Puko

IMF: US-CHINA TRADE WAR STARTING TO WEIGH ON GLOBAL ECONOMY

Washington, Sep 12 (efe-epa).- The International Monetary Fund said Thursday that the trade war between the United States and China is already triggering a...

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

New tariffs applied on Chinese imports to the US

Beijing, Sep 12 (efe-epa).- China's Customs Tariff Commission of the State Council has postponed the planned 25 percent tariffs on 16 products from the...

EU's top diplomat visits Mexico to boost trade agreement

By Eduard Ribas i Admetlla

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.