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How Eddie Lampert benefits from destroying Sears

Via Crain's, Business Insider explains in detail how Eddie Lampert has structured his financial holdings so that he may benefit more from Sears' destruction than from its success:

For all the problems in Sears stores, Lampert has set up his various businesses in a way that means he has other ways to gain no matter what happens to the company.

ESL holds a majority share of Sears, and that stake has lost three-quarters of its value just in the past few years — more than $1.5 billion since early 2015 alone.

But Lampert, through ESL, has loaned Sears more than $1.12 billion and promised an additional $679 million over the past two years to help keep the company afloat. In return, Sears pays origination fees and interest directly to ESL, and, by extension, Lampert. A recent shareholder complaint claims that Lampert and ESL made at least $19 million in fees and interest payments from a $400 million loan in 2014.

Lampert and ESL could potentially seize stores and inventory if Sears can't pay its bills. That $400 million loan, for instance, is backed by collateral of 25 stores valued at $500 million total.

Even if the company went bankrupt, Lampert wouldn't walk away empty-handed, according to bankruptcy experts and former executives.

How on earth did Sears' board allow this to happen? Oh, right—Lampert owns 54% of the company, and so appoints the board.

There are shareholder lawsuits, of course, though it's doubtful they'll succeed. And so the murder continues.

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