Bankruptcy

Sears gets right kind of message from wrong person

6 Dec 2018

Chairman Eddie Lampert is offering $4.6 bln to buy the U.S. retailer out of bankruptcy and save 50,000 jobs. Focusing on employees is laudable. But Lampert failed to turn Sears around in more than a decade of trying. Its staff and advisers would be better off with new ideas.

Motown shifts recovery up a gear

4 Dec 2018

Detroit is selling its first bonds since taking back full financial control from the state. The city that went bankrupt in 2013 now has balanced budgets, higher tax revenue and a surplus. But issues like blight and a crumbling school system present tricky speed-bumps to negotiate.

Toys R Us buyout firms offer crumbs for holidays

20 Nov 2018

KKR and Bain are giving $20 mln to employees who lost jobs in the retailer’s bankruptcy. That’s better than nothing, and an intriguing precedent. But it won’t go far among tens of thousands of people. It’s also a pittance compared with the fees the firms took over the years.

Lampert now at mercy of Sears, not vice versa

15 Oct 2018

The bankrupt retailer’s top owner dragged investors along for over a decade as he kept it alive against the odds. Now although he’s owed some $2.6 bln, he’s no longer in charge and he’ll have to fight with other lenders and the government’s pension guarantor for every dollar.

Sears’ checkout moment is a lesson in timing

11 Oct 2018

The retail chain is on the brink of bankruptcy after creditors lost patience. Its fate may follow that of Toys R Us, which is being liquidated. Retail failures are common but not inevitable. Sears might have had a shot if boss Eddie Lampert had grasped the nettle six years ago.

Mattress Firm is the stuff of retail nightmares

5 Oct 2018

The bed store owned by South Africa’s Steinhoff is filing for bankruptcy protection, and blame spreads wider than a king-sized duvet. Overexpansion, underpricing, predatory online rivals and Chinese dumping make for a fable about how retailers can fail even in a healthy economy.

Financial crisis mostly put “D” in dealmaking

18 Sep 2018

Many of the bank investments and takeovers inked as markets cratered a decade ago brought at least as much pain as progress to the instigators. Think JPMorgan buying Bear and WaMu. Breakingviews looks back at some of the flops – and a couple of high-flyers.

Lehman is long-term champion in Wall Street hubris

12 Sep 2018

Take a firm with leaders seasoned from previous crises. Add a bubble in an asset they considered their specialty. Let them ignore their own risk rules and throw in supine watchdogs. How Dick Fuld crashed Lehman should scare sense into generations of bankers and overseers.

Summer lulls offer false sense of security

10 Aug 2018

That, at least, is the lesson of August 2008. A complacent Citi exec claimed the lender had more than enough capital, Merrill handed one banker a $40 mln guarantee, GM’s CEO was talking up its prospects - and the Fed was worried about inflation. The hubris didn’t last long.

Review: The complex causes of the financial crisis

3 Aug 2018

The upheaval that’s unfolded over the past decade had myriad origins. In “Crashed”, Adam Tooze brings a historian’s perspective to the crisis and its aftermath. His ambitious narrative links Wall Street turmoil to euro zone disorder, but is stumped by political ructions in 2016.

How Sergio Marchionne saved Fiat and Chrysler

30 Jul 2018

The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.

John Malone could still snag iHeartMedia

10 Jul 2018

Even though lenders to the bankrupt U.S. radio operator snubbed his last offer, the media tycoon has a chance thanks to the potential for a merger with his own Sirius XM. As iHeartMedia edges toward a $20 bln debt restructuring, there should be room for a harmonious deal.

ECB has big enough stick to repel bad-loan revolt

24 Apr 2018

A political backlash may force the European Central Bank to ditch plans for stricter provisioning of 760 bln euros of dud loans. The saga has weakened chief supervisor Daniele Nouy, and may delay reform of Europe’s banking union. But the ECB has other tools to cut the loan pile.

Lampert gives Sears something to grin and bear

23 Apr 2018

The hedge fund manager, also CEO and largest owner of the flailing retailer, wants to buy its assets. Sure, there’s a chance he is getting an opportunistic deal. But Toys R Us shows that for retailers, bankruptcy risk is real. Lampert’s last ditch may be the least bad outcome.

Cox: A beneficent billionaire should buy Remington

27 Mar 2018

The AR-15 maker filed bankruptcy papers a day after millions of Americans marched in favor of banning its products. Owners and creditors just want out in a hurry. But Bloomberg, Gates or Bezos could turn Remington into a force for sensible gun policies with mere pocket change.

Private equity goes back to dangerous superlatives

20 Mar 2018

Strong buyout returns have investors putting more money than ever into funds that acquire companies with loads of debt. But deal multiples are nearing record highs, too. As legacy LBOs like Toys R Us and Claire’s go bust, it’s a reminder of the industry’s tendency to overheat.

Who broke Toys R Us? Toys R Us did

15 Mar 2018

The retailer is liquidating over 700 U.S. stores. The woes were mainly self-inflicted: high costs, declining sales and onerous interest payments wiped out profit. Amazon played a role. Yet basic retail and financial risks sealed Geoffrey the Giraffe’s fate, as it may for others.

Malone co-investors have heard this tune before

27 Feb 2018

The media magnate will inject $1.2 bln for a 40 pct stake in troubled radio company iHeartMedia after it goes bankrupt. Creditors would take losses, but the price seems fair. Still, Malone’s past rescue of Sirius XM sounds a note of caution. His help rarely comes cheap.

Too-big-to-fail rules are too sound to scrap

21 Feb 2018

A long-awaited U.S. report on resolving big financial institutions recommends beefing up the bankruptcy code while keeping the door open to government intervention in emergencies. It’s possible to quibble with the details, but the big-picture proposals strike a sensible balance.

Gibson amping sound up to 11 – Chapter 11, that is

20 Feb 2018

The maker of six-stringed axes favored by Jimmy Page and Slash faces increasing distortion from changing tastes, cheap competition and an overpriced foray into electronics. It doesn’t help that quality guitars last a while. This rock'n'roller can expect a major haircut.