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   Non-TechSears Holdings Corp.


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From: Sr K2/13/2019 11:04:08 AM
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HOD 2.41 at 10:55 AM

Latest 2.37 Up 25.4%

Volume 7.422M

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From: Sr K3/7/2019 1:42:34 AM
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3/7/2019

Stanley, Black & Decker (SWK), which accused it of breach of contract and trademark infringement over its new line of professional-grade mechanics tools under the Craftsman Ultimate Collection brand.

Sears did not immediately respond to requests for comment. The complaint was filed in Manhattan federal court.

Craftsman had been an iconic Sears brand before Stanley paid about $900 million for it in March 2017, while giving Sears what it called a "limited" license to sell some Craftsman products.

But according to the complaint, Sears breached the license agreement by launching its new tool line and touting its stores as "the real home of the broadest assortment of Craftsman."

Stanley said the tagline falsely implies that other Craftsman products are "somehow illegitimate."

It also said Sears' actions threaten to confuse shoppers and irreparably harm Stanley's own Craftsman brand and trademarks, as well as its goodwill and customer relationships.

Sears emerged from Chapter 11 in February after longtime Chairman Edward Lampert, who oversaw its years-long descent into bankruptcy, won court approval for a $5.2 billion takeover, which included the Craftsman licensing rights.

The reorganized company was expected to have about 425 Sears and Kmart stores, down from roughly 3,500 when those companies merged in 2005. Sears brands also include DieHard and Kenmore.

Reuters

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From: Sr K4/16/2019 10:55:36 AM
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In an 8-K filed this morning:

As previously reported, on October 15, 2018 (the “Petition Date”), Sears Holdings Corporation (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code.

The Company does not believe that there will be sufficient funds or other assets in the Estate to allow holders of the Company’s common stock to receive any distribution of value in respect of their equity interests and expects to file a chapter 11 plan memorializing that belief in the coming weeks.

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To: Sr K who wrote (948)4/20/2019 10:18:22 AM
From: Glenn Petersen
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Sears sues former CEO Edward Lampert, claiming he stripped $2 billion in assets as it headed to bankruptcy

Lauren Zumbach
Chicago Tribune
April 19, 2019

Sears Holdings Corp. has filed a lawsuit against its former chairman and CEO, Edward Lampert, and his hedge fund, claiming they wrongly siphoned $2 billion in assets from the company as it headed for bankruptcy.

While promising a turnaround based on unrealistic financial projections, Lampert and his investors instead systematically picked off the retailing giant’s most valuable and enduring assets as the company’s losses deepened, the lawsuit asserts. Ultimately, the company was forced into bankruptcy — after Lampert and his investors benefited at the company and creditors’ expense, the lawsuit says.

“Had defendants not taken these illegal and improper actions, Sears would have had billions of dollars more to pay its third-party creditors today and would not have endured the amount of disruption, expense, and job losses resulting from its recent bankruptcy filing,” lawyers for company wrote in the lawsuit.

The lawsuit was filed by the team winding down what remains of Sears’ business after Lampert purchased the majority of its remaining assets in a bankruptcy auction this year and formed a new company out of those assets. The complaint, filed Wednesday in the U.S. Bankruptcy Court in the Southern District of New York, seeks to recover the property that was allegedly fraudulently transferred.

The lawsuit also names former Sears directors and ESL executives and directors including U.S. Treasury Secretary Steven Mnuchin, a former investor and executive at ESL, and Kunal Kamlani, president of ESL and a former Sears director, as defendants, as well as Sears shareholder Fairholme Capital Management and its founder Bruce Berkowitz.

ESL said the allegations are “misleading or just flat wrong.”

“We are confident that the processes we followed for each of these transactions are unimpeachable. We reject the debtors’ allegations and will vigorously contest their complaint concerning these transactions,” the hedge fund said in a statement.

Fairholme said it was in the process of reviewing the filings. Berkowitz, chief investment officer of Fairholme, joined Sears’ board in February 2016 and at one point held 24 percent of the company’s stock. He stepped down the following year and in early 2018 wrote that Sears’ continued losses “wrecked” his funds’ performance in a letter accompanying Fairholme’s annual report. By November, Sears reported that Fairholme owned just 4 percent of its stock.

A request for comment from Mnuchin, made through the Treasury Department’s website, was not answered.



Sears lawsuit against Edward Lampert.

The lawsuit claims Lampert directed employees to produce financial plans reflecting “fanciful, bad-faith” predictions of a turnaround in Sears’ performance, while pursuing transactions that allegedly unfairly benefited Lampert, ESL and other defendants. Those transactions involved Orchard Supply Hardware Stores, Sears Hometown and Outlet Stores, Sears Canada, Lands’ End and Sears’ real estate investment trust spinoff, Seritage Growth Properties.

In its statement, ESL said that Sears was solvent throughout the period the transactions took place and received more than $3 billion through the transactions criticized in the lawsuit. Those funds were used to reduce debt and fund operations and all shareholders were treated equally, the hedge fund said.

ESL said it provided more than $2.4 billion in secured financing, and that all transactions with Sears “were done in good faith, on fair terms, beneficial to all Sears stakeholders” and approved by Sears’ board and a committee overseeing transactions involving potential conflicts of interest.

It’s not the first time critics of Lampert’s tenure at Sears have accused him of stripping cash-strapped Sears of its most valuable assets. A committee of unsecured creditors made similar allegations during Sears’ bankruptcy and the company faced a shareholder class-action lawsuit over the Seritage real estate deal, which was settled for $40 million in 2017.

Lampert’s and ESL’s initial attempts to buy the retailer out of bankruptcy sought to guarantee that they would not be held liable for controversial transactions the hedge fund made with Sears. Following opposition from the creditors, ESL’s successful $5.2 billion bid dropped that requirement.

Such lawsuits aren’t uncommon in cases where an individual with financial ties to a bankrupt company ends up purchasing that company, said Larry Perkins, bankruptcy expert and CEO of SierraConstellation Partners.

But they typically involve much smaller companies. It’s rare for an individual to have as much influence as Lampert did over a company with Sears’ scale, he said.

“Everyone is suspicious of someone who controls all the transactions and at the end says they’re all fair,” said Bruce Markell, professor of bankruptcy law and practice at Northwestern University.

Litigation is a way of testing that assertion, which comes down to whether Sears got a fair price for assets it sold, he said.

The lawsuit spells out a series of deals that it maintains allowed a group of insiders at Sears, led by Lampert, to methodically carve out the ailing retailer’s most valuable assets in ways they stood to gain at the expense of the Sears and its creditors, starting with the 2011 spinoff of home improvement chain Orchard Supply Hardware Stores Corp.

Sears shareholders received Orchard stock but paid nothing to Sears, according to the complaint. Lampert and ESL’s shares were worth at least $81 million, Fairholme’s $20 million and Tisch’s $5 million, the lawsuit states. Tisch, Lampert and Mnuchin were on Sears’ board at the time of the spinoff.

The following year, Sears Hometown and Outlet Stores was spun off and Sears shareholders were given rights to purchase shares in the new company, followed by the partial spinoff of Sears Canada. In both cases, Sears shareholders including Lampert, ESL, Fairholme and Tisch received shares worth millions, according to the lawsuit.

Lands’ End followed in 2014. According to the lawsuit, Sears knew the apparel brand had potential buyers: Leonard Green Partners and the Tommy Hilfiger investment group had expressed interest in investing in Lands’ End. But Lampert rejected the overture, which would have left fewer shares in the spun-off company for Sears’ investors – of whom Lampert and ESL were the largest, attorneys for Sears claim.

In Seritage’s case, lawyers for Sears allege the property under the 266 stores spun off into Seritage Growth Properties were undervalued by at least $649 million, while terms that let Sears lease back space were unfair to the retailer, according to the complaint.

The terms ensured “that Sears would continue to pay Seritage rent, even for unprofitable stores, and that Seritage could invest those funds in redevelopments that ousted Sears from its most profitable stores,” the complaint states.

Lampert is both an investor in Seritage and its chairman.

While the number of transactions outlined in Sears’ lawsuit gives the appearance of a pattern, “when you’re running a company that’s deeply distressed, your options are limited and sometimes you’re making the best of bad options,” said Perkins of SierraConstellation.

“The accuracy is going to be played out over time,” he said.

While Seritage has been able to find new tenants paying higher rents for many of the properties it purchased, Orchard has closed all of its stores and Sears Hometown and Outlet Stores is struggling, with ESL saying it was forced to step in to keep the Hometown chain from liquidating earlier this week.

Neil Stern, senior partner at Chicago-based consulting firm McMillanDoolittle, said that because the assets weren’t put up for sale on the open market, it is more difficult to assess whether Sears got a fair value.

Sometimes, a private sale can produce a better deal, but that can be difficult to prove after the fact, said Markell of Northwestern.

Stern said he thinks Lampert was doing his best to turn the company around. But his fund’s financial dealings with the company meant that by the time it sought a buyer in bankruptcy, “he was holding all the cards.”

“Only one person understands the value of the company, and that’s him,” Stern said.

lzumbach@chicagotribune.com

Twitter @laurenzumbach

chicagotribune.com

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From: Sr K9/5/2019 11:25:15 AM
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Sears boosts SHOS payout about $1.00 from $2.25 to $3.25

Liberty Tax, Inc. To Acquire Outlet Business From Sears Hometown And Outlet Stores, Inc.

August 27, 2019

VIRGINIA BEACH, Va. and HOFFMAN ESTATES, Ill., Aug. 27, 2019 /PRNewswire/ -- Liberty Tax, Inc. ("Liberty Tax") (OTC Pink: TAXA), the parent company of Liberty Tax Service and Buddy's Home Furnishings, and Sears Hometown and Outlet Stores, Inc. ("Sears Hometown") ( SHOS) today announced that they have entered into a definitive purchase agreement (the "Purchase Agreement") whereby Liberty Tax will acquire Sears Hometown's Outlet business as well as its Buddy's Home Furnishings Stores (collectively, the "Sears Outlet business") in an all cash transaction valued at up to approximately $132.9 million.

Liberty Tax intends to finance the transaction through a combination of new debt, Liberty Tax's balance sheet cash and/or an equity contribution from an affiliate of Vintage Capital Management, LLC ("Vintage"). In connection with the execution of the purchase agreement, Liberty Tax entered into a debt commitment letter with Guggenheim Credit Services, LLC, as administrative agent and lead arranger, and clients managed by Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners, and an equity commitment letter with an affiliate of Vintage, each of which is subject to customary conditions.

The sale of the Sears Outlet business (the "Sale") is in accordance with the terms of the agreement and plan of merger between Sears Hometown and Transform Holdco LLC ("Transform"), which was previously announced by Sears Hometown and Transform on June 3, 2019 (the "Merger Agreement"). As a result of the Sale, which is estimated to result in Net Proceeds (as defined in the Merger Agreement) of approximately $121 million, the merger consideration payable by Transform in the merger transaction for the outstanding shares of Sears Hometown not owned by ESL Investments, Inc. and its affiliates is estimated to be approximately $3.25 per share in cash, an increase of approximately $1.00, or approximately 44.4%, from the previously announced base merger consideration of $2.25 per share. The actual increase, if any, in the per share base merger consideration in the merger transaction with Transform is dependent on the actual amount of Net Proceeds realized by Sears Hometown in the Sale, which may be lower than the current estimate. ESL Investments, Inc. and its affiliates, the majority owners of Transform, presently hold approximately 55.2% of the outstanding shares of Sears Hometown. Concurrently with its entry into the Purchase Agreement, Sears Hometown entered into a letter agreement with Transform and a wholly owned subsidiary of Transform which, among other things, provides that, subject to the satisfaction of certain conditions, the merger will close substantially concurrently with the closing of the Sale.

Both the Sale and the terms of the Purchase Agreement have been unanimously approved by the Boards of Directors of both Liberty Tax and Sears Hometown, and have also been approved by the Special Committee of the Sears Hometown Board of Directors. The Sale and the merger between Sears Hometown and Transform are each expected to close in October 2019, subject to the satisfaction of specified conditions. In addition, Buddy's Newco, LLC ("Buddy's"), a wholly owned subsidiary of Liberty Tax, has acquired 41 Buddy's Home Furnishings stores from A-Team Leasing, an existing Buddy's Home Furnishings franchisee. In connection with its sale of these Buddy's Home Furnishings stores to Liberty Tax, A-Team Leasing intends to become a franchisee of five Sears Outlet locations, with this franchising transaction expected to become effective concurrently with the Sale. Liberty Tax's acquisition of the 41 Buddy's Home Furnishings stores from A-Team Leasing was financed, in part, through approximately $23 million of additional borrowings under the existing secured credit facility of Buddy's.

The acquisition of Sears Outlet is an important step forward in the evolution of Liberty Tax's strategic objectives, as it follows the July 2019 acquisition of Buddy's Home Furnishings and the proposed acquisition of The Vitamin Shoppe, Inc. ("Vitamin Shoppe") announced earlier in August. This unique portfolio of Sears Outlet retail stores and distribution capabilities will add complementary products and sales channels and enable Liberty Tax to offer high quality home goods to consumers across the nation, while also offering unique value propositions. Upon the closing of the Sale, Liberty Tax's store portfolio will include several hundred retail locations with a combination of company operated and franchisee operated stores.

Andrew Laurence, Chairman of Liberty Tax's Board of Directors, said, "We are excited about the acquisition of Sears Outlet and its unique model that offers its customers in-store and online access to outlet-value products across a broad assortment of merchandise categories, while serving as a valuable supply chain partner for its vendors. This is a continuation of Liberty Tax's strategy of identifying and acquiring franchised or franchisable businesses while also building scale at attractive acquisition valuations. It's an exciting time for Liberty Tax and its shareholders as we begin to recognize the strength in our future-facing franchise business model."

Will Powell, Chief Executive Officer and President of Sears Hometown, said "The Sears Outlet business is a profitable business with a unique business strategy that, as part of the dynamic Liberty Tax group of companies, is expected to generate future growth."

Shearman & Sterling LLP acted as legal counsel to the Special Committee of the Sears Hometown Board of Directors and PJ Solomon acted as its financial advisor.

About Liberty Tax, Inc.

Liberty Tax, Inc. (OTC PINK: TAXA) is the indirect parent company of Liberty Tax Service and Buddy's Home Furnishings and expects to acquire Vitamin Shoppe in the third or fourth quarter of 2019. In the U.S. and Canada, last year, Liberty Tax prepared approximately two million individual income tax returns in more than 3,100 offices and online. Liberty Tax also owns Buddy's Home Furnishings, a specialty retailer engaged in the business of leasing and selling consumer electronics, residential furniture, appliances and household accessories. Liberty Tax is focused on the evaluation and acquisition of franchise-oriented or complementary businesses. Liberty Tax also supports local communities with fundraising endeavors and contributes as a national sponsor to many charitable causes.

About Sears Hometown and Outlet Stores, Inc.

Sears Hometown and Outlet Stores, Inc. is a national retailer primarily focused on selling home appliances, hardware, tools and lawn and garden equipment. Its Hometown stores (which includes its Hometown Stores, its Hardware Stores, and its Home Appliance Showrooms) are designed to provide its customers with in-store and online access to a wide selection of national brands of home appliances, tools, lawn and garden equipment, sporting goods and household goods, depending on the particular format. More than 90% of its Hometown Stores are operated by independent local dealers or franchisees.

Its Outlet stores are designed to provide its customers with in-store and online access to new, one-of-a kind, out-of-carton, discontinued, reconditioned, overstocked, and scratched and dented products across a broad assortment of merchandise categories, including home appliances, lawn and garden equipment, apparel, mattresses, sporting goods and tools at prices that are significantly lower than list prices.

About Guggenheim Investments

Guggenheim Investments ("Guggenheim") is the global asset management and investment advisory division of Guggenheim Partners, with more than $209 billion1 in total assets under management across fixed income, equity, and alternative strategies. Guggenheim focuses on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Guggenheim's 300+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled Guggenheim to deliver innovative strategies providing diversification and attractive long-term results. Guggenheim Investments ("Guggenheim") is the global asset management and investment advisory division of Guggenheim Partners, with more than $209 billion1 in total assets under management across fixed income, equity, and alternative strategies. Guggenheim focuses on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Guggenheim's 300+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled Guggenheim to deliver innovative strategies providing diversification and attractive long-term results.

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From: Sr K12/23/2019 5:45:54 PM
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Sears sells DieHard brand to Advance Auto for $200 million

Advance Auto Parts said it will sell DieHard auto batteries in its more than 4,800 stores

Earlier 12/23/2019

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