Why Sears Bankruptcy Should Outrage You


https://www.youtube.com/embed/4wrSwkI5G1U Sears has actually submitted for chapter 11 insolvency security now that'' s an essential thing to bear in mind because in a current judgment it was shown that Sears will be able to pay its leading employees countless dollars 10s of millions of dollars in perks although calvess workers are being laid off and shops are closing so the company behind the Sears and Kmart chains on Friday acquired a u.s. personal bankruptcy courts consent to pay as much as twenty 5 point three million dollars in bonuses to leading executives and other high-ranking employees at Sears which once again declared chapter 11 insolvency defense in October now the judge provided the green light to Sears proposal that it provide perks approximately eight point four million dollars to nineteen executives if Sears meets some monetary targets throughout the next 6 months those workers would be eligible for money if Sears is placed to reach those targets when sold now I also wish to sort of juxtapose all the beautiful benefits these executives and leading ranking workers are getting to what a few of the laid-off staff members got what did those laid-off staff members get do they get a severance no they got absolutely nothing they got nothing fine and then when you check out even more into this story you realize how Sears was essentially ruined by its very own CEO who ultimately stepped down previous Sears CEO Eddie Lambert was understood for running the business via videoconference from his Island estate he couldn'' t be troubled to do the meetings not understand that no it becomes worse it gets even worse very same store sales decreased every year under the billion-dollar hedge fund managers management so just what did he succeed after masterminding the 2005 merger of Sears and Kmart Lambert invested 6 million dollars on stock buybacks to reward investors and improve the share price more filling corporate financial obligation on Sears and Kmart via loans from ESL so what is ESL I read that and I was type of curious about it yeah that'' s ideal ESL is his hedge fund that ' s his hedge fund'that ' s his hedge fund okay so you want to hear the last piece of this which is the last twist in the back here so he ' s now saying hi possibly I might acquire what'' s left of the business through ESL so you buy the companies you load them up with debt brand-new stock buybacks to enrich yourself and other financiers you damage the business everyone gets fired except you people you get extra benefits and then you take the truck like what'' s remaining of the company and after that you purchase it back at a at a great discount rate so you continue generating income when everybody else is devastated and fired so that'' s how this video game is played and look I'' ve got it there ' s 2 aspects of the media coverage of this that drive me insane top is they can not get it through their heads that private equity and hedge fund men are playing shell video games with these business so they keep reporting it as if Sears had basic problems and they do this for all the different stores that are being shut down like Toys R Us they'' re like oh competitors from Amazon and they'' re having difficulty in retailers and that is a small part of the story yes it is a part of the story then however they make it appear like that'' s the bulk reason it is not the significant factor for these shutdowns is since private equity companies are available in they pack them up with debt and part of the debt is to just pay themselves they just take the cash and take it house and after that they head out appearance at all the death of the business has it well I think we shouldn'' t do any upgrades on any of the stores then unless people come to the shops we shouldn'' t pay the employees that much and after that you have staff member concerns and they go oh my god I guess this isn'' t working out shut it down trash it fire everyone then purchase it again and do it all over again right ideal and the media doesn'' t report it that method they just don'' t look excellent even because sentence then he masterminded this we suggest he masterminded it it'makes it appear like it ' s a favorable thing right and you understand simply a and stress which shank says this previous CEO who'' s still the chairman of Sears will not only make cash from damaging Sears he will make cash through these personal bankruptcy proceedings so I suggest once again it is a shell game we have seen it occur with other businesses toys-r-us consisted of but I also desire to simply quickly discuss the argument for these rewards so the argument to the court was hey look we require to make certain that we keep or keep leading talent even through this very hard time I imply we'' re filing for chapter 11 personal bankruptcy people might think about going elsewhere uh yeah by what do you mean what do you suggest keep them why would you want to keep them these high level employees I indicate look I understand that it'' s it ' s mainly the CEO and you understand the truth that he'' s a hedge fund a guy who used his own hedge fund to damage this business but no no let'' s clean home what do you suggest pay them tens of millions of dollars in bonus offers to keep them so look I'' m a little bit more combined on that one'and I ' ll tell you why and I ' ll tell you where I arrive on it so you need some individuals to Shepherd the business through and if everybody leaves is an even bigger catastrophe alright therefore there might be experts who do this etc but unfortunately a lot of times what they really desire is people that know the business to remain there to bring it through the personal bankruptcy and some of that is totally genuine all right but let'' s look at the scale of this I did the math on those rewards for the 19 magnates not their wages their bonuses would be on typical four hundred and forty two thousand dollars remember they are the exact same executives who helped to bankrupt a business now that the employees get 4 hundred forty 2 thousand dollars although they didn'' t do anything incorrect no so individuals who did the important things wrong get massive bonuses the things the people who do things right get absolutely nothing they get fired so there is something that is fundamentally wrong here I comprehend that you got to keep the business going I comprehend that you individuals require specific incentives to make that occur and once again they might but you can'' t find anybody other than the losers who screw it up in the very first place and you need to give them a giant benefit on top that'' s where I get super hesitant and the part that grates on me the most is the very same thing that grates on an ax when they refer these people as leading talent mm-hmm well if they were so skilled why is the company bankrupt in the very first location so they'' re so gifted we have to offer him a 4 hundred and forty thousand dollar reward for due to the fact that they were great enough to remain on it the business they bankrupted that doesn'' t look like skill to me okay possibly it was all a shell game prior to in the first place maybe the majority the blame requires to go on the CEO the previous CEO however you guys were all executives at the company didn'' t you notice there was something failing prior to the bankruptcy didn'' t you try to fix it and if you were so gifted and you thought this was a mess and you accurately saw that why didn'' t you go somewhere else prior to look if you are actually leading skill and at a company you would understand the importance of your workers and the people that help that business run and those people got laid off with no severance fine so I'' m not gon na sob a single tear for any of these individuals because while they'' re gathering their 4 hundred 4 hundred thousand dollars in whatever rewards all these other individuals who got fired got definitely nothing no severance it'' s incredibly last thing on it guys look I'' ve dealt with a lot of executives at in my life along these lights they'' re not that skilled guy they'' re simply not they make it appear like oh they'' re the only ones with an unique wonderful gift to understand finance and to understand how to run a company you'' d be surprised at how straightforward it is okay no it is not something magical that only individuals earn money countless dollars can do the original concept was they earn money all that money since their companies do so well today due to the fact that of the systemic corruption that we have everyone forgot the original concept and they still get millions of dollars even when they bankrupt the business and they'' re still called leading skill they'' re'simply not look there ' s a space in the market I ' m not the one to do it however like you understand there a lot of start-ups now that do disturbance of old businesses someone need to do a start-up where they staff bankrupt business and have individuals who make money an affordable rate and understand how to take companies out of insolvency instead of letting the losers who bankrupted it in the first place make $400,000 in bonuses for what they'' ve done and one final note is there are things that are necessary like you need attorneys you require various experts accountants etc they didn'' t have anything to do with the decisions that were made you have to maintain them right or you need to have brand-new people that come and do those tasks however the ones that are out there you know the c-suite you know the executives that made the active choices that caused the insolvency they got no skill at all and we should have no usage for them on the go put on'' t concern we got you covered you still listen to TYT at our new podcast network discover us on Apple podcast at Google Play Store or at TYT comm slash podcast [Music] As discovered on YouTube – Creative Commons License

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License: Creative Commons