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Rich, I think DTB kind of hit the nail on the head.

I think Eddie has earned this reputation you mention (that he is disadvantaging others for his own enrichment) *because* Sears has sucked; so that he somehow profited at someone's expense. I think this narrative exists primarily because we have this lore in the US that rich people are super human... he's rich 'so of course' he had a master plan -- if Sears didn't do well, his master plan must have made him rich.. right?

I think this is bad logic and it doesn't fit the facts.

Eddie (and I have argued as much for 5-6 years) clearly was putting his money where his mouth was in that he "thought" Sears could turn around. Every opportunity he could, he doubled down, he kept buying in many classes (stock, debt, loan, etc). He held onto SHOS spin off. He didn't sell during SHLD buybacks (thus concentrating his ownership). He exercised rights (rights that were made available to all SHLD shareholders, not restricted) for SRG spin off. He lost money on OSH, lost money on SCC.T, lost money on SHOS, etc

He was wrong, and I do *not* believe he had a master plan. But I also do not believe he harvested some extra for himself vs. others. I think the opposite is true, and it's pretty easy to see.

It is indeed true that now you can look and see he and his LPs have ownership at a senior secured level of some debt, (and some junior debt, and a lot of stock) but that is also because they put that money up at rates that were arguably below what others were offering at arms length. I would say that now that we are in Ch 11/7, it will be a different game as Eddie will try to take as much for his senior classes as he can... but maybe not. Eddie and the banks no longer owe fiduciary duty to shareholders... but I take objection to the oft characterized message that Eddie was striping SEARS for himself... he clearly was underinvesting in sears (not sure that was wrong or right), but he didn't enrich himself with those funds. He sent $6B to shareholders over the past 12 years or whatever, and also paid a lot of bond interest that didn't necessarily need to be paid (I know, I was a recipient of that goodwill as a bond holder) as a filing could have come sooner. He also, as noted above, kept buying in one form or another all the way down. there was no "advantage" to him doing so, I do not believe.

So I defend Eddie's ethics and honesty all while I probably feel less good will toward him in terms of skills of management than many other watchers...

But directly, I do not think there was a master plan. There was a belief that inside a massive business with many locations, there could be scraps of profitability. He was indeed right on that... but I think the scraps are too small, and the losses in the interim getting there were too large, for it to work out well for most stakeholders.

Cheers,

Ben
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