Hedge fund manager Eddie Lampert must have been pinching himself. His fund, ESL Investments, had loaned $500 million to doomed retailer Sears. But now, even though the company continues to spiral around the drain, Sears CEO Eddie Lampert had come up with $100 million to pay ESL—which, in case you were wondering, stands for Edward S. Lampert—back. Surely, now was the time for ESL’s Lampert to cut ties with Sears’ Lampert and invest that $100 million in something that might actually make, or at least is not guaranteed to lose, money.
Alas, hedge fund manager Eddie Lampert cannot do that, for he and Sears CEO Eddie Lampert are one and the same. And so the former has lent the latter that $100 million back—at a higher interest rate and shorter term, to be sure—with promises for another $100 million more if the latter can find some new collateral for the former.
Sears borrowed $100 million from affiliates of Lampert’s hedge fund, ESL Investments, which also agreed to lend up to $100 million more by Dec. 1.
Sears tapped funds made available through a January agreement that gave the company access to up to $500 million, backed by mortgages on 61 Sears properties.
Sears borrowed all $500 million, leaving that line of credit fully tapped, according to a regulatory filing. But the Hoffman Estates-based retailer repaid about $100.5 million after selling real estate, freeing up funds for the $100 million loan disclosed Thursday.
Sears CEO Edward Lampert opens his wallet, again, with $100 million loan [Chicago Tribune]