Needless Markup
Amazon’s $475 million bet on the Saks-Neiman Marcus merger goes to zero in bankruptcy court
This Week In Blunders – Jan. 11-17
There is nothing so useless as doing efficiently that which should not be done at all.” – Peter Drucker
You can always pay more for luxury at Neiman Marcus and one the richest companies in the world wasn’t afraid to do just that.
But now Amazon wants a refund on the $475 million it invested in Saks Global’s $2.7 billion takeover of Neiman Marcus in December 2024.
As expected, Saks Global filed bankruptcy on Wednesday. Within hours, the online retailing giant objected to the financing plan for the Chapter 11 restructuring, saying it would cement its massive loss.
Read More: Sacking Saks (Business Blunders)
“That equity investment is now presumptively worthless,” Amazon’s attorneys wrote in a court filing. “Saks continuously failed to meet its budgets, burned through hundreds of millions of dollars in less than a year, and ran up additional hundreds of millions of dollars in unpaid invoices owed to its retail partners.”
What did Amazon think would happen? That shoppers with too much money would click for a $180,000 Artemest x Kiton Bespoke Trunk? Yeah, just stick one of those in a smiling cardboard box and leave it on the porch.
Saks Global was in the business of strapping together dying department store chains, including Bergdorf Goodman. It merely continued its strategy of taking on debt, selling assets and screwing suppliers with late payments.
Amazon didn’t even get a stitch of collateral. Now it can stand in line behind Saks’ secured creditors. Pretty predictable.
Amazon thought it was getting a cheap entrance into the luxury goods market. Instead it got the ol’ cliche: A Needless Markup.
UnitedHealth is bleeding us, report says
While Luigi Mangione faces the death penalty for allegedly gunning down UnitedHealthcare CEO Brian Thompson in December 2024, the health care giant continues facing investigations into its own actions.
On Sunday, the U.S. Senate Judiciary Committee issued an extensive report claiming that UnitedHealthGroup was “gaming the Medicare Advantage System.”
Read More:
UnitedHealth Scare (Business Blunders)
Natural Born Killers (Business Blunders)
The Killionaire (Business Blunders)
“Bloated federal spending to UnitedHealth Group is not only hurting the Medicare Advantage program, it’s harming the American taxpayer,” said Iowa Republican Sen. Chuck Grassley, who chairs the committee. “UnitedHealth Group appears to be gaming the system and abusing the risk adjustment process to turn a steep profit.”
The report, based on more than 50,000 pages of UnitedHealth documents, accuses the company of exaggerating patient diagnoses so it can bill more.
For instance, the report says some patients are diagnosed with dementia without a proper evaluation. Others are declared opioid dependent when they are simply taking prescribed mediations. Some are diagnosed with cataracts, even after they’ve had cataract surgery.
A UnitedHealth spokesman told The Wall Street Journal that the company disagreed with the report, which stops short of declaring wrongdoing.
Separately, the Journal reported in May that UnitedHealth is “under criminal investigation for possible Medicare fraud.”
Perhaps all these mounting troubles explain why UnitedHealth CEO Andrew Witty abandoned ship in May – or in corporate lingo, decided to leave for “personal reasons.”
Dead Reckoning
The day after Bob Weir’s death, notable Deadhead and Chairman of the Federal Reserve Jerome Powell finally stood up to President Donald Trump.
On Sunday, he delivered his defiance in a two-minute video statement following months of harassment and a dubious criminal investigation aimed at destroying the independence of the central bank.
Read More: Our Deadhead Fed Head
Powell hasn’t made all the right moves, but slapping the Fed Chair with a criminal subpoena just because he won’t lower interest rates fast enough for the next election is just plain corrupt.
The world’s central bankers have rallied behind Powell, demonstrating that they’re more free than their counterpart in the so-called land of the free. Even the right-leaning editorial board of The Wall Street Journal called it “Lawfare for Dummies, Monetary Edition”
It’s especially stupid because Powell’s term ends in May and now he may decided to stick around since he can still be on the Fed board until 2028. Additionally, Republican Sen. Thom Tillis, who sits on the Senate Banking Committee, said he would oppose the confirmation of any Trump Fed nominees until the investigation ends.
Nepo baby Bill Pulte, the grandson of PulteGroup founder William J. Pulte and head of the Federal Housing Finance Agency, initiated the Powell investigation, according to WSJ reporting.
What more can a homebuilder wish for but zero interest rates to sell more houses?
And who needs the Fed, and all its pesky research and tedious consensus-building exercises, when we have a “very stable genius” and Nobel Peace Prize recipient to make the call?
Our Dead Head Fed head has finally had enough of this folly, and he can gather strength from Bob Weir’s legacy and insightful lyrics:
“And the rich man in his summer home; Singing just leave well enough alone; But his pants are down, his cover’s blown; And the politicians throwing stones.”
STG Logistics files bankruptcy
Speaking of the Grateful Dead, Dublin, Ohio-based intermodal transportation giant STG Logistics announced Monday that it had filed Chapter 11 bankruptcy.
The company is following the standard blueprint: Borrow recklessly to grow rapidly through acquisitions, hit a rough patch, then unload the debt in bankruptcy court. Its acquisitions included Best Dedicated Solutions, purchased in 2023, and the intermodal segment of XPO Logistics, bought in 2022.
The plan now is to ditch 91% of its debt through the bankruptcy process … and just keep truckin' on.
Don’t Miss These Blunders
Was Maxwell Smart? Ghislaine Maxwell lived her life between two international crooks: Her father Robert Maxwell and sex-offender Jeffrey Epstein. Some people think they were spies.
Volkswagen Dipsticks German automaker burns trust even faster than oil
Pork Jello Sandwich Do you mean the McRib isn’t actually made from real rib meat? Say it ain’t so.
Biggest Business Blunders Of 2025 It was a year of forbidden love, economic anxiety, corporate breakups, bankruptcies, CEO resignations, Jeffrey Epstein, and the Tesla Chainsaw Massacre
Sacking Sachs No one pulls off a smash-and-grab like a privateer
Best Read Blunders Of 2025 Here’s what clicked the most for me on Substack this year. Not my best work, not the biggest story, not even the most-important development – but it clicked.Tax Time For A Dead Billionaire Texas businessman Robert T. Brockman coughs up $750 million from beyond the grave.
Going All Enron On Them Before subprime auto lender Tricolor imploded, its CEO allegedly proposed one of the dumbest stunts in corporate history
Kat’s Creepy Creations Where can you buy human body parts? Try Harvard Medical School.
How To Rob A Greedy Bank Mary Carole McDonnell has been retired for seven years after allegedly defrauding banks that didn’t bother checking out her story
Small Town Bankster Reckless lending, casino gambling and allegedly doctored books led to the demise of a century-old community bank. Now its CEO faces prison time.
JPMorgan Chase Can Check Their Butts A young entrepreneur duped the bank out of $175 million. Now her defense lawyers are billing the bank for cellulite butter.
Be Thankful For 3D-Printed Chicken Soup Campbell’s fired an employee without first asking the right questions. Now he’s putting a big dent in its can.
Straighten Up And Fly Right Transportation Secretary Sean Duffy says, ‘The Golden Age of Travel Starts With You,’ as the horrifying passenger antics continue
Winter Is Coming For Summers I warned readers about Larry Summers’ gross incompetence in 2013. Now it’s back on full display in emails with Jeffrey Epstein.
Pardon My Ponzi Twice-convicted swindler Eliyahu Weinstein got a Trump commutation. Now he’s going to back to prison for a third fraud.
Insuring Lust AIG can’t seem to find a faithful man