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from the and-isn't-it-ironic?-don't-you-think? dept.
Arthur T Knackerbracket has found the following story:
Sears, the one-time titan of American retail, filed for bankruptcy ahead of a $134 million debt payment due Monday and announced that it will close 142 stores.
For years, Sears has contended with the threat that it would become the latest big-name retailer to fall to online competition and crushing debt. The icon once known for its pristine catalogs, and more recently known for decrepit showrooms and a controversial chief executive, saw its stock price plunge last week after reports that it had hired an advisory firm to prepare a bankruptcy filing ahead of the Oct. 15 payment.
Early Monday morning, Sears announced it had filed for Chapter 11 bankruptcy -- which would allow it to reorganize and possibly reemerge from bankruptcy with some part of the business intact -- and received commitments for $300 million in debtor-in-possession financing to carry through the bankruptcy period while it restructures its debt and reorganizes its business.
[...] Sears will close 142 unprofitable stores near the end of this year, with liquidation sales at those stores expected to begin soon. It was not immediately clear where those stores are located or how many jobs would be affected. Those store closings are in addition to 46 others that were expected by next month.
[...] It has also already sold off many of its brands, including Craftsman tools, and hasn't turned a profit since 2010. Many of its most valuable properties have been sold off, with the other half leased and offering little cost savings from rent restructurings since Sears already pays below market rents.
-- submitted from IRC
(Score: 1, Insightful) by Anonymous Coward on Tuesday October 16 2018, @11:06PM (2 children)
It's definitely not an ethical obligation to do that, it's permissible though. There is no law that requires that companies maximize shareholder value at any length necessary.
I'm not really sure where people get that idea, but it's not a legal requirement. And such a legal requirement would be crazy as it would result in large numbers of people losing their entire investment if they buy in just as they're doing something particularly reckless to maximize value.
The problem here, like most others in America, is that we've got legalized bribery. Individuals that buy companies just to saddle them with debt that then has to be written off in bankruptcy court should go to prison. The only reason it doesn't happen is because they've bribed the legislature and executive branches to look the other way.
(Score: 0) by Anonymous Coward on Wednesday October 17 2018, @01:34AM
The only reason it doesn't happen is because they've bribed the legislature and executive branches to look the other way.
Why shouldn't they look the other way? The voters will reelect them anyway. That's all that matters. It's quite simple, this will continue as long as we let it. Your elected officials are not the ones to blame here. It's not their fault that their bad behavior is so rewarding. That issue lies directly with the voters who don't seem to understand the irony of their complaints... They bitch about the stone in their shoe, but won't atop for a second to take it out.
(Score: 2) by shortscreen on Wednesday October 17 2018, @09:24AM
Your post appears to be addressing something different than GP, but in any case...
The gov doesn't require it. But it's normal for "maximize shareholder value" to be stated in a corp's corporate charter. On occasion, investors have threatened to sue over actions that were perceived as failing to meet this goal. So naturally, execs can also fall back on this excuse "we must do X or we could be sued for not maximizing shareholder value!"