Just a couple of eye-roll-worthy lunchtime links today:
So many things this morning, including a report not yet up on WBEZ's website about the last Sears store in Chicago. (I'll find it tomorrow.)
- Jennifer Rubin advises XPOTUS "critics and democracy lovers" to leave the Republican Party.
- Senate Minority Leader Mitch McConnell (R-KY) completely caved against a unified Democratic Party and will vote to extend the (probably-unconstitutional) debt limit another three months.
- An abolitionist's house from 1869 may get landmark approval today from the Commission on Chicago Landmarks. (It's already in the National Register of Historic Places).
- Could interurban trains come back?
- Arts critic Jo Livingstone has a mixed review of No Time to Die, but I still plan to see it this weekend.
- 18 retired NBA players face wire-fraud and insurance-fraud charges for allegedly scamming the NBA's Health and Welfare Benefit Plan out of $4 million.
- Even though we've had early-September temperatures the past week, we've also had only 19% of possible sunlight, and only 8% in the past six days. We have not seen the sun since Monday, in fact, making the steady 19°C temperature feel really depressing.
- Two new Black-owned breweries will go on the Brews and Choos list soon.
- Condé Nast has named Chicago the best big city in the US for the fifth year running.
Finally, President Biden is in Chicago today, promoting vaccine mandates. But because of the aforementioned clouds, I have no practical way of watching Air Force One flying around the city.
Update, 12:38 CDT: The sun is out!
Update, 12:39 CDT: Well, we had a minute of it, anyway.
Eddie Lampert, corporate murderer, has managed to drive his once-great company out if its home state:
Sears' last Illinois location, at Woodfield Mall in Schaumburg, is set to close in November.
The Hoffman Estates-based retailer’s parent company, Transformco, announced the decision today.
"This is part of the company's strategy to unlock the value of the real estate and pursue the highest and best use for the benefit of the local community," the company said in a statement.
Eddie Lampert continues to destroy the once-great retailer Sears piece by piece. Yesterday, the company revealed that it has sold the DieHard battery brand to Advance Auto Parts for $200m in cash:
The move follows news in October that Sears had hired investment bankers to advise it on potential asset sales, including the DieHard brand, according to the Wall Street Journal at the time.
Sears has spent the last several years selling key brands to receive cash infusions and survive. In 2017, it sold the Craftsman tool brand to Stanley Black & Decker.
In February 2019, Transform Holdco, owned by former Sears CEO Edward Lampert and his hedge fund, emerged as the buyer of 425 Sears Holdings stores after the company filed for bankruptcy in late 2018.
As the House Judiciary Committee goes through the unfortunately necessary step of having expert witnesses state the obvious, other things caught my attention over the course of the morning:
Finally, two CTA employees were fired after one of them discovered an exploitable security hole in bus-tracking software, and the other tested it. The one who discovered it has sued under a Federal whistle-blower statute. Firing someone for discovering a potentially-catastrophic software design error is really dumb, people.
Two made the news this week. First, Lampert has sued Sears (which he owns) for not conveying property that his investment firm bought from the doomed retailer:
Lampert's Transform is accusing the Sears estate, a bankrupt shell entity that is winding down under court supervision, of multiple wrongs including breaking the agreement by holding on to the chain's headquarters in Illinois. The estate is also intentionally delaying payments to vendors and trying to shift $166 million in accounts payable costs, according to the Transform complaint filed on Saturday.
The allegations mirror those made in court filings from Transform earlier this year. The Sears estate also sued Lampert, U.S. Treasury Secretary Steven Mnuchin and others last month, claiming they wrongly transferred $2 billion of company assets beyond the reach of creditors in the years leading up to the retailer’s bankruptcy.
Meanwhile, in another case, Lampert filed court documents in which he threatens not to pay $43m in severance payments he promised to make:
Lampert also denied that he is responsible for making some payments to creditors he says Sears Holdings is trying to force him to pay, according to the filing. Sears Holdings is the bankrupt remnants of the old Sears. It exists only to settle claims against it involving its few remaining assets.
Lampert had previously agreed to pay the severance to workers who lost their jobs before and during Sears' bankruptcy. Creditors objected to Sears paying severance to people laid off before the bankruptcy, so those workers never received an exit package.
Lampert's attorneys told the bankruptcy court that Lampert and his hedge fund ESL were the best owners to help workers who lost their jobs in various rounds of store closings.
But in the latest court documents, ESL said it wouldn't make the severance payments because Sears didn't give the hedge fund all of the assets it spelled out in ESL and Lampert's agreement to buy Sears. That included the amount of store inventory originally promised by Sears, as well as the company's headquarters in suburban Chicago.
Wow, he really wants to win Worst CEO of the Century, doesn't he? And remember, Lampert never cared about Sears as a going entity; he has always and only wanted the land Sears owns. What a schmuck.
While waiting for the Mueller Report to download (spare a moment to pity the Justice Department's servers), an alert came in from Crain's:
“Had defendants not taken these improper and illegal 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,” lawyers for the estate said in a court filing.
The complaint, filed as part of the retailer’s ongoing bankruptcy case, asks that the transactions be ruled fraudulent transfers and says creditors should be compensated.
Lawyers for the estate also allege that ESL stripped Sears of the real estate under 266 of the retailer’s most profitable stores, undervaluing the land by at least $649 million. “Moreover, the culpable insiders arranged for Sears to lease the properties back under blatantly unfair terms,” according to the complaint.
It's interesting to me how people who claim that the government has no right to interfere in private affairs seem to make that claim to avoid scrutiny of shady behavior. And Lampert seems to be one of the shadiest.
On Thursday, a court accepted Eddie Lampert's $5.2 bn bid to keep Sears running and himself as its head:
Lampert’s purchase, made through his hedge fund, ESL Investments, is intended to keep 425 Sears and Kmart stores open, preserving some 45,000 jobs. It was the only bid submitted in an auction that would have kept the once-mighty department store giant in business and avoid liquidation.
Lampert’s plan was opposed by a committee of unsecured creditors skeptical that Hoffman Estates-based Sears will be any more successful after exiting bankruptcy. The committee pushed for a liquidation, arguing that shutting down the company and selling its assets could recover more of what Sears owes.
Still unresolved is a dispute between Sears and ESL over which is responsible for paying $166 million for inventory received after Sears filed for Chapter 11 bankruptcy on Oct. 15. Although Drain did not have jurisdiction to decide the issue, he gave an advisory opinion in favor of Sears’ claim that ESL is responsible for those liabilities.
The judge’s decision saves Sears from liquidation, but still unanswered is whether Lampert can reinvigorate a retail chain that many consumers have fond memories of, but no current relationship with. Lampert has said he wants to invest in smaller stores and those that are profitable, with a focus on popular categories like appliances and repair services.
I'm not a bankruptcy attorney, so I don't know whether this is a good ruling. I, personally, would have preferred that Sears stay open and Lampert stay far away from it. But at least it's not dead yet.
In descending order of pissed-off-making:
- Senate Majority Leader Mitch McConnell called making Election Day a holiday "a power grab," because more people voting does in fact take power away from the Republican Party. (We used to call this sort of thing a gaffe.)
- US Senator Elizabeth Warren (D-MA) criticized adolescent Sears Holdings CEO Eddie Lampert for exactly the things The Daily Parker has criticized him for all along. "It appears that you have enriched yourself while driving the company into bankruptcy," said Warren. No kidding. (She didn't annoy me; Lampert did.)
- Restaurants have gotten so loud even restaurant critics have noticed: "Those beautiful, minimalist spaces that are so in vogue reflect sounds, making it hard to hear your dining companions."
- The tolerant, thoughtful guys over at Immigration and Customs Enforcement set up a fake university to find and deport people committing immigration fraud through student visa abuse. (I'm not as much annoyed as concerned when law enforcement uses blatant deception to catch people, but I agree that policing student visas is appropriate.)
- Lack of sleep has become a national health crisis. (I almost forgot to add that I've averaged 6½ hours for the first 30 nights of 2019, getting 7 hours only 9 times this year, according to my Fitbit.)
And with that last one, I may now go take a nap.
The Pension Benefit Guaranty Corporation—read: the government—read: us, as we live in a frickin' REPUBLIC—has taken over the Sears Holdings pension fund because, basically, Eddie Lampert has driven it into the ground:
The agency covers individuals’ pensions, up to certain limits, if an insured pension plan shuts down without enough money to pay all benefits. It estimates Sears’ two pension plans are underfunded by about $1.4 billion. As a creditor, the agency could attempt to recover some of that money through the bankruptcy.
Ron Olbrysh, chairman of the National Association of Retired Sears Employees, said the guarantee means retirees aren’t worried about losing pensions, but they do have concerns about other benefits.
“The pensions are secure through Sears or through the Pension Benefit Guaranty Corp.,” he said. “The big impact if Sears does liquidate is that retirees will lose life insurance.”
The Daily Parker has followed the destruction of America's iconic retailer for years, watching the incompetence and self-dealing of Eddie Lampert the whole time. And here we are. Lampert will slide away from Sears with tens, or even hundreds, of millions of dollars, while the people who actually showed up every day to keep the stores open go bankrupt. Ironically, Lampert gets to do this by declaring bankruptcy. And the banks and investors he's stiffing have known this would happen for years. But they'll still show up in Federal court to argue that their claims to Sears' assets trump (no irony there) the employees'.
There seems to me a simple solution to the problem that Lampert's destruction of Sears epitomizes. Let's just change the law slightly to make officers of corporations liable in civil and criminal actions for the behavior of the corporations they represent. It's not a radical idea: corporations already have the right to act as people under the law. This is a simple balancing.
I don't think it's controversial to say that Eddie Lampert should experience all the consequences of his horrible management of Sears, including going down with the sinking ship. Especially because his management of the company was to drill a hole in the keel and then let his managers fight over how to keep the ship afloat.
When the revolution comes, I hope Lampert—and by extension, his adolescent worship of Ayn Rand—will be first against the wall.