Mr. Bankruptcy himself, Donald Trump, says Sears was mismanaged for years.
Trump’s Treasury Secretary, Steve Mnuchin, was on Sears Board for years:
Steven Mnuchin was a member of Sears’s board from 2005 until December 2016, and before that was a director for K-Mart Corp., which was acquired by Sears in 2005.
“Sears has been dying for many years,” Trump told reporters as he departed the White House on Monday to inspect hurricane damage in Florida. “It’s been obviously improperly run for many years and it’s a shame.”
Mnuchin was a college roommate of Sears Chairman Eddie Lampert, who attended Mnuchin’s confirmation hearing for Treasury secretary in January 2017. Mnuchin cut his ties to Sears when he joined the Trump administration.
For many of those years—Mnuchin was helping Eddie Lampert dismantle and suck Sears Holdings dry, while he was on Sears Board.
Sears has been on a downward trajectory that accelerated after Lampert took control of the company up to its bankruptcy announcement today. In 2006, shortly after Lampert took the reins at Sears, its stock traded at $162 a share; by 2017, it traded at under $10, and in August 2018 was trading at a little over $1. But while the retail giant has lost money, closed stores, and laid off workers — over the past decade it has closed more than 1,000 stores and reduced employment by 175,000 workers, Lampert and his hedge fund are doing just fine.
You can bet that Lampert will not lose in Sears bankruptcy proceedings. He really is a despicable human being. His hedge fund has been destroying companies and the lives of workers for over 30 years.
Lampert has made billions running Sears Holdings into the ground and the big losers here will be the workers—who will lose their jobs and suffer cuts to their retirement income.
Lampert is not only Sears’ largest shareholder, his hedge fund also holds a large part of Sears’ debt, and collects interest and fees on loans it has made to keep Sears operating. The debt guarantees that Lampert will have a seat at the table when the terms of today’s bankruptcy are worked out; lenders take precedence over shareholders in bankruptcy court proceedings, and big lenders over smaller ones. Lampert has already given a hint as to what he will push for: At the end of September, he proposed having Sears pay off certain loans and swap other debt for new debt that converts to equity. Because his hedge fund owns debt in the category to be repaid, Lampert and ESL could recoup more than $1 billion under this plan. The losers would be smaller debt holders whose debt would be converted to nearly worthless equity in Sears.
The biggest losers in this, as in other retail bankruptcies, are the workers thrown out of work as stores close. There are also about 100,000 retirees who will face cuts in retirement income if Sears can offload their pensions to the Pension Benefit Guaranty Corporation in the bankruptcy. Whatever happens, Lampert is likely to come out of this a winner.
This brings me back to the morally corrupt Steve Mnuchin, who is now the Treasury Secretary of another Sears Holdings to be—The United States of America.
Mnuchin, Trump and their cronies in the GOP Congress are bankrupting America.
The U.S. federal budget deficit rose in fiscal 2018 to the highest level in six years as spending climbed, the Trump administration said Monday.
The deficit jumped to $779 billion, $113 billion or 17 percent higher than the previous fiscal period, according to a statement from Treasury Secretary Steven Mnuchin and Office of Management and Budget Director Mick Mulvaney. It was larger than any year since 2012, when it topped $1 trillion. The budget shortfall rose to 3.9 percent of U.S. gross domestic product.
Just like the Sears worker will lose in bankruptcy—the bankruptcy of America by the Republican Party will eventually punish the rest of American workers as well.
Trump, Mnuchin, Lampert and the rest of their morally corrupt cronies will be fine.
Do you want to end this Republican moral corruption?
VOTE on November 6th, 2018. Find your polling place now: www.vote.org
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