AM I NEXT? NO LOVE AT ZACKY FARMS

Turkeys are synonymous with Thanksgiving and the joyous celebration of abundance.

Not so much for City of Industry, California-based, woman-owned Zacky Farms, a major producer of turkey meat products, which has announced that it has filed for Chapter 11 Bankruptcy and is closing its corporate offices in Los Angeles, California and its processing plants in Fresno and Stockton, California.

Approximately 500 employees will be laid off. This is not the first time that Zacky Farms has seen financial trouble, emerging from a previous bankruptcy in 2013.

In a statement to workers, the company noted…

“After four generations and an enormous effort to keep the company in sync with the fast pace of changing times, we no longer are able to keep up with business as usual. We have put our best foot forward but as we struggled in the current state of the industry conditions, it has been impossible for us to continue profitably.”

The company also posted this message on their website…

“This message is brought to you from the HR Department at Zacky Farms. It comes with great sorrow that Zacky Farms has announced that it will be winding down its operations. Zacky has struggled in the current state of the industry and it has been impossible for it to continue profitably. Zacky has been diligently engaged in seeking business and capital; however, those exhaustive efforts have been unsuccessful and Zacky must now proceed with steps to cease operations. As Zacky winds down, it is presently expected that all operations will completely cease on January 19, 2019. Employees will be given a formal notification from Zacky concerning their individual employment status.”

“The Company understands that this is a difficult time for everyone (employees, customers, vendors, the community). We would like to extend a heartfelt thank you to everyone who has worked by the company’s side all these years. Thank you for being a part of the Zacky family and allowing us to continue for four generations; without you it would not have been possible.”

At least one employee has filed a lawsuit which they are attempting to certify as a class action, alleging that the company did not provide a required advance notice of the layoffs. The company tells federal officials that it was unable to provide such a notice because it might interfere with the company’s ability to obtain additional funding. In a filing to local, state, and federal officials, the company explained, “Please take notice that Zacky is attempting to provide as much notice as possible. In the preceding months, Zacky has been actively seeking capital which, if obtained, would have enabled Zacky to avoid or postpone the closure of the Zacky plants and Zacky’s management reasonably and in good faith believed that giving notice while these efforts were ongoing would have precluded Zacky from obtaining the requisite capital to avoid the closures.”

It can happen to anyone, anytime, anywhere ... are you wondering, Am I Next?

AM I NEXT? IS SEARS A SINKING SHIP? (06/01/22)

JUNE 1, 2022 — 100+ SEARS HOMETOWN STORES TO CLOSE

Transformco has announced that at least 71 Sears Hometown stores will be offering liquidation sales and permanently closing in the coming weeks.

The stores were independently owned and operated, dealer-managed smaller-format stores selling "a range of home products, including appliances, lawn & garden, tools, and sporting goods."

“Unfortunately we must announce the closing of our Sears Hometown Store. It is not a decision that we have made lightly. We have loved all of our time that we have been able to spend with you over these last 10 years."

MARCH 18, 2021 — SEARS CLOSES SAN ANTONIO, TEXAS CALL CENTER; 67 LAYOFFS

Hoffman Estates, Illinois-based Transformco, the parent company of Sears and Kmart, has announced the closure of its San Antonio call center resulting in 67 layoffs.

This follows the call center located in Round Rock, Texas in October 2021 with 170 layoffs.

NOVEMBER 15, 2019 — BLOODBATH CONTINUES WITH THE CONTINUING CLOSURE OF NON-PERFORMING STORES AND THE LAYOFF OF 200+ EMPLOYEES

The impacted employees are located at the company’s Hoffman Estates, Illinois headquarters, and the company's offices in San Francisco, California.

The company refuses to comment on the exact number of layoffs but claims it is under 300.

According to a company spokesperson, “Since purchasing substantially all the assets of Sears Holdings Corporation in February 2019, Transformco has faced a difficult retail environment. We have been working hard to position Transformco for success by focusing on our competitive strengths and pruning operations that have struggled due to increased competition and other factors. Unfortunately, this process resulted in a number of difficult but necessary decisions, including closing stores and making adjustments at our corporate headquarters and field positions to reflect our new structure. We regret the impact that this has on our associates and their families."

SEPTEMBER 4, 2019 — MASSIVE LAYOFF AT SEARS HQ

Sears management has announced that it is laying off about 250 employees at its Hoffman Estates headquarters starting on October 28, 2019, but the facility will remain open. but there are “no current plans to close the entire facility,” the retailer said in a notice filed with the state.

“Affected employees will be placed on a paid administrative leave effective immediately for the time prior to the employment termination date.”

UPDATE: AUGUST 31, 2019 — RUMOR ABOUT MASSIVE LAYOFF AT SEARS HQ

According to a columnist at Forbes Magazine, “80% of the workforce at Sears Hoffman Estates, IL corporate offices had been laid off last night.”

DECEMBER 27, 2018 — DID LAMPERT THROW SEARS A LEAD LIFE-RING WITH BANKRUPTCY BID FOR ASSETS?

Once again, Eddie Lampert, the investor/executive who is most associated with the destruction of the enterprise, steps up with a $4.4 billion bid for Sears assets and certain liabilities.

While another 80 stores close in the first quarter of 2019, Lampert recently requested that the bankruptcy court authorize $25.3 million in bonuses for key executives and managers to retain their services as the ship continues to sink. The bonuses were approved.

Not only will much of Lampert’s investment and loans come off the top in any liquidation, his investment is still secured by real estate and other assets associated with the Sears brand.

Betting is heavy that Sears will not return to its former glory as one of the top retailers in America, but may become a secondary brand to an electronic retailer who has limited brick and mortar operations.

Already plans are underway to turn the company’s iconic Santa Monica, California location into a mixed-use development. The development is a joint venture between Seritage Growth Properties (another Lampert venture) and outside investors. Many believe that Lampert and Seritage are plundering Sear’s real estate assets for their own benefit and as a way for Lampert to extract further pre-liquidation value from Sears and Kmart.

OCTOBER 15, 2018 - GAME OVER - SEARS FILES FOR BANKRUPTCY

Early this morning Sears filed for bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. With some debtor-in-possession funding, it appears that Sears will be able to keep some stores open through the holiday season.

Of course, CEO Eddie Lampert blamed shifting customer preferences, the continuing impact of e-commerce, negative stories in the media, and unspecified other causes. Not surprisingly, he did not mention his bad leadership, poor management, and the reluctance to invest in the enterprise as root causes of the retailers dysfunction.

While Lampert has given up his position as the CEO, he is retaining the Chairman’s title and it is too soon to tell whether or not the court will closely monitor transactions between Sears’ Holdings and Lampert’s ESL (Edward S. Lampert) which at times has appeared to be self-serving and advantageous to Lampert and detrimental to Sears and its shareholders.

It is now a game of lawyers fighting over the sale of real estate and iconic brands. There is little or no chance that Sears can emerge from these proceedings as a viable company with manageable debt as long as Lampert is at the controls. ESL is Sear’s largest shareholder and investor.

OCTOBER 10, 2018 — Original post…

It should come as no surprise to anyone who follows the self-serving machinations of Eddie Lampert and his ESL Holdings, that one of his key investments, Sears, is preparing to file for Chapter-11 bankruptcy if the creditors do not restructure Sears massive $134 million debt due in a few days or accede to Lampert’s demands. Of course, Lampert, who is Sears’s Chairman and CEO as well as Sear’s largest shareholder and biggest creditor, could simply make the payment and claim another Sears asset as collateral. Perhaps allowing him to purchase another significant property like Sear’s Kenmore brand at a deeply discounted rate.

Lampert appears to have engaged a number of restructuring experts, financial advisors, attorneys, and others familiar with bankruptcy, workouts, and restructuring. And while Sears investors, creditors, and employees have been significantly affected by Lampert’s mismanagement of Sears, Lampert appears to be continuing to strip Sears real estate and brands on a favored basis.

According to published reports, Sears Holdings has engaged M-III Partners to prepare a contingent bankruptcy filing should creditors suggest filing papers for an involuntary bankruptcy to preserve assets.

One wonders how Sears is going to survive the 2018 holiday season when so many of its vendors are demanding either upfront payments or cash on delivery. Or, how you run a store operation with a skeleton crew and a lack of experienced managers and supervisors. In what universe can the cash-hemorrhaging former retail giant generate enough money to service $5.5 billion in debt without a court-ordered haircut for secured bondholders and creditors.

With Sears becoming a penny stock, it is time for employees to consider taking to their personal lifeboats because this latest storm surge may swamp the ship.

Are you wondering, Am I Next?

NO LOVE AT BAY AREA MEDICAL CENTER (WEBSTER, TEXAS)

Bay Area Regional Medical Center, a five-year-old, $200 million facility in Webster, Texas has announced that they will be closing its hospital facility and laying up to 900 workers as they file for bankruptcy. 

The nine-story, 375,000-square-foot Bay Area Regional Medical Center facility opened on July 21, 2014, with 104 patient suites, including 22 intensive care unit rooms. The acute-care hospital also provides a full-service emergency room with 11 treatment rooms, three cardiac-catheter suites and five operating suites, including one hybrid operating room which functions as a dual cardiac-catheter and operating suite. The facility is supported by a 6-story parking garage and accommodations of 675 vehicles. Plans to add an additional two floors to increase the number of beds to over 250 will accommodate population growth in the area. Because Webster, Texas lies in a known tornado-hurricane zone, the hospital has been specially engineered to withstand excessive winds. 

CEO Stephen K. Jones issued the following statement …

“It is with a heavy heart that I announce that Bay Area Regional will close its doors on May 10, 2018. We want to thank our staff who worked tirelessly, physicians who chose to practice medicine and patients who received care at our hospital.”

To be noted, CEO Jones assumed his current position after the death of predecessor Tim Schmidt of pancreatic cancer in May 2017.

According to Medical Center spokesperson Santiago Mendoza, Jr. …

“Utilization of the hospital was not an issue contributing to the closure. In the latest market share data that just came out, we were the second busiest hospital in this market for most service lines and the No. 1 in for orthopedics. It’s a shame we’re closing,” he said. “Unfortunately we were not able to get favorable contracts with managed care companies, insurance companies.”

The 191-bed hospital, which was built through a partnership between Medistar Corporation and Surgical Development Partners and is owned by Houston-based Medistar Corporation. There was no mention of  Medistar’s Webster Medical Plaza which was to provide adjacent medical offices in close proximity to the hospital. 

This is the type of story that makes you wonder about the status of healthcare reform post ACA (Affordable Care Act) that saw insurance rolls, especially under Medicaid, dramatically increased with no corresponding increase of facilities, physicians, and diagnostic equipment. To allow a modern facility such as the Bay Area Regional Medical Center to die is inexcusable. 

But one wonders if this bankruptcy is a ploy to legally reduce debts by converting them into equity and to allow another, more politically-connected, operator to assume control over the facility “on the cheap?” In any event, it is the employees who will suffer. 

Are you asking yourself, Am I Next?