Upstart Representative Alexandria Ocasio-Cortez (AOC) and Presidential candidate Senator Elizabeth Warren have sent a letter to Sears’ former CEO Eddie Lampert, criticizing him for his efforts to avoid repaying Sears for $43 million in severance to the retailer’s workers. A war of words and accusations between Lampert and the now defunct Sears Holdings has Lampert claiming the pay back to employees is no longer valid. The argument stems from Lampert’s acquisition of the beleaguered retailers assets.
Lampert bought Sears assets through an affiliate of his hedge fund ESL. Lampert as its CEO headed up Sears as it spiraled into chapter 11. The original deal, which saved the company from total liquidation, also stated that Lampert would reimburse Sears severance costs for workers who lost their employment in the bankruptcy. Further muddying the waters is the fact Steven Mnuchin, Trumps secretary treasury, was on the board of directors at Sears and now both him and Lampert are being sued by Sears. Adding more conspiracy to the story is the additional fact that Sears bankrupt pension were taken over by the Pension Benefit Guaranty Corporation (PBGC), an organization that helps administer and settle pension’s claims from involvement members. It just also happens to be overseen by Mnuchin, as well as the secretaries of commerce and labor. You can’t make this stuff up.
Now that the smoke is clearing, or just starting to clear as the case may be, Lampert and his firm are claiming Sear’s part of the deal is suspect and he may not pay the severance pay.
Yes it sounds complicated and it likely is, but my point is not the bankruptcy itself but the camel nose insertions by Warren and AOC, who for all intents and purposes, probably know less about Sears and its acquisition then the lowliest assistant accountant in any one of the number of firms that are handling the Sears mess.
Likely based on more of a political pulpit than an employee related one, although Warren has bankruptcy knowledge by study, AOC probably leans more into the personal experience aspect of the mechanism. Not to say she’s filed bankruptcy, she hasn’t, but her net worth of only a few thousand (Weeklystandard.com) mostly stemming from a bartending job gives little reason to think she knows much about a corporate bankruptcy such as a size that is the Sears liquidation. More likely she is exercising her well known talent of riding the political bandwagon and shooting off her now infamous mouth.
The point here being is that both the army of Sears lawyers and accountants along with the Lampert’s many CPA’s together with the bankruptcy courts will get to the bottom of this and probably get pretty close to if not spot on to the truth and who is possibly screwing who.
That Warren and AOC are joining forces, both of whom recently appeared together in their own version of a propaganda video on the Sears issue, the question should be asked is exactly what, besides more dissent, is their goal here?
Like I said, the armies of lawyers and accountants that are likely to see all the financials will bring their findings to the courts and then the courts will decide. That Warren and AOC are attempting to stir up controversy because one of the people involved is a cabinet member of the current administration is typical of the political maneuvering that is common among those that practice such things.
Warren and AOC can’t possibly help the financial forensics. The accountants and lawyers involved would never permit it. What Warren and AOC can do is cause more hate and polarization that many claim has become the cornerstone of their party’s strategy. In more common language, they love to stir the brown stuff.
Marc Cuniberti hosts “Money Matters” on KVMR FM aired on 65 radio stations nationwide. He is a financial columnist for a variety of publications. Marc holds a BA in Economics from SDU with honors 1979. His website is moneymanagementradio.com and he can be reached at (530) 559-1214. Visit him on Facebook (FB) under Marc Cuniberti and also on the "Money Matters” and “Money Matters Investing in Community" FB pages. The views expressed are opinions only.