Eddie Lampert Shattered Sears, Sullied His Reputation, and Lost Billions of Dollars. Or Did He?

IMG_3799They called Eddie Lampert many things. “The Next Warren Buffett,” Business Week gushed in 2004. “Genius,” according to Fortune in 2006. A “celebrity shareholder,” Institutional Investor labeled him in 2013.

But in mid-October of this year, they were calling him something entirely different. Privately, hedge fund managers distanced themselves, with one calling Lampert a practitioner of “predatory capitalism.” But perhaps the worst assaults came from those claiming to be employees of Sears Holdings — the company that Lampert had famously spent $1.5 billion to acquire, manage, and, as of that month, drive into bankruptcy.

The “CEO egomaniac” whom some called “Fast Eddie” was “ruining the company,” they wrote. “Eddie Lampert doesn’t know the first thing about retail,” another complained. “He is just a hedge fund manager that is looking for an exit strategy.”

One person put it more bluntly: “Eddie Lampert sucks.”

The tale of Eddie Lampert’s Sears fiasco is a blueprint for how the financial engineering in full swing across corporate America could so utterly fail — with hedge fund managers reaping rewards along the way.

Although current Sears shareholders have lost almost their entire investments, tens of thousands of employees have lost their jobs, and creditors — including the U.S. government — and others are owed $11 billion, Lampert has still made nearly $1.4 billion to date from his Sears investment, a number that has never been calculated before. It’s also a sum that could change radically — up or down — depending on the outcome of what is likely to be a contentious bankruptcy process, which is now unfolding.

You can read the entire sordid tale here:





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