USA Today has a story saying that if Sears Holdings indeed goes belly-up - as is being largely predicted these days, as even the company itself concedes that its future is in "substantial doubt" - it is possible that its $900 million sale of its Craftsman brand to Stanley Black & Decker could be voided.
The reason? It is possible, the story says, that a court could determine "that Sears was insolvent at the time of the deal close or became insolvent because of it, among other conditions." In addition, "Other recent transactions, including Sears' 2014 spin-off of retail chain Lands' End, could also be unraveled if the company is deemed to have been insolvent at the time, Sears warned."
The reason? It is possible, the story says, that a court could determine "that Sears was insolvent at the time of the deal close or became insolvent because of it, among other conditions." In addition, "Other recent transactions, including Sears' 2014 spin-off of retail chain Lands' End, could also be unraveled if the company is deemed to have been insolvent at the time, Sears warned."
- KC's View:
-
Sounds like it is all going to depend on how the courts define "insolvent." Sears has been creatively insolvent for a long time, and as far as I'm concerned, its path to irrelevance and obsolescence has been clear for years.
