Kmart, Sears, and ESL

How a Hedge Fund Became One of the World’s Largest Retailers

The Unusual Weekend

January 11, 2003, was the weirdest Saturday that Eddie Lampert could remember. Most Greenwich billionaires do not spend their weekends lying in bathtubs in cheap motels eating cold chicken. Unfortunately, the setting was not only odd; it was quite ominous. Lampert was fully clothed, blindfolded, and handcuffed.

The previous day, Lampert, 42, had sat in his office at ESL Investments, the multibillion-dollar hedge fund he controlled. The fund’s clients included savvy institutions and famous names such as Michael Dell and David Geffen, but Lampert himself was the single largest investor. He had spent much of his time that Friday poring over documents ...

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