Lampert, the CEO has been running a legal shell game with Sears since his hedge fund bought it out when they were flush with cash from the “Kmart miracle”. They bought out Kmart the first time it was dying, cut a bunch of fat, the “New Kmart stock” that didn’t have to honor any of the old Kmart shareholders that lost it in the bankruptcy, shot up to $50/share for a bit.
Sears is actually two corporations, and Lampert was the CEO of both. One is the Sears retail operations, the other separate incorporation is the Sears real estate holding company. That actually can be a good corporate structure. The real estate holding company can hold all the assets and leverage them as collateral for investing, while the retail operation pays rent which comes off their profit/loss figures and cuts their taxes etc. Of course that’s only IF the retail side is successful. So under this arrangement, Sears retail pays rent to the Sears real estate holding co. Lampert was able to keep on sucking rent money from Sears retail, even as it kept going into debt, and put that money into his hedge fund.
Usually a hedge fund just parts out a business at a profit and moves on. Lampert figured out how to extract money in slow motion over the course of several years.
And even as the Sears locations closed and the retail operations died, those buildings and lots were still on the books of Sears real estate as a huge slew of assets, which his fund could use as collateral to get cheap financial loans at prime rate, then make 10-15% on those loans in the stock market. Easy money.
My personal guess is that all the other things Lampert went around doing with Sears, declaring a “new direction” and capturing customer data and infometrics, the half-hearted late attempt to become an online retail portal like Amazon, and basically going around terrorizing all of Sears retail’s upper management was all for show. I think it was just to create a credible defense that Lampert “was trying” against anyone who wanted to sue him over corporate mismanagement as Sears circled the drain.