Sears creditors seek to sue Eddie Lampert and challenge his victory in purchasing the company out of bankruptcy
- A group of Sears creditors is challenging Eddie Lampert's victory in purchasing the ailing retailer out of bankruptcy.
- "ESL's current bid to 'save the Company' is nothing but the final fulfillment of a years-long scheme to deprive Sears and its creditors of assets and its employees of jobs while lining Lampert's and ESL's own pockets," the committee of unsecured creditors, or UCC, said in a filing.
- Lampert's bid will keep about 400 stores open and retain 45,000 jobs. It still needs approval by a US bankruptcy court.
A group of Sears creditors is challenging Eddie Lampert's victory in purchasing the company out of bankruptcy and asking for permission to sue Lampert and his hedge fund, ESL Investments.
"ESL's current bid to 'save the Company' is nothing but the final fulfillment of a years-long scheme to deprive Sears and its creditors of assets and its employees of jobs while lining Lampert's and ESL's own pockets," the committee of unsecured creditors, or UCC, stated ina filing on Thursday.Lampert, who is Sears' chairman, won a bankruptcy auction on Wednesday to keep the 126-year-old retailer from liquidating.
Sears advisers accepted Lampert's bid, worth more than $5.2 billion, after two days of tense negotiations.
The UCC filing called Sears' downfall "tragic" and accused Lampert of dismantling Sears for his own financial benefit.
"Nothing can undo Sears's excruciating, slow motion destruction at the hands of Lampert and ESL," the filing states.
"But without any such recourse, Lampert and ESL will have created the perfect blueprint for future bad actors: stack a company's board of directors with allies and devotees; with their blessing, raid the company's cash and assets; in the process, dismantle operations and put hundreds of thousands of employees out of a job; and, finally, manipulate chapter 11 proceedings to obtain the company's remaining assets for a bargain while falsely claiming to 'save' a fraction of the jobs already sacrificed."
A Sears spokesman declined to comment. ESL did not immediately respond to a request for comment.Read more: 'There is no way Sears is going to survive': Sears may live on, but some say failure is inevitable
ESL has said there was nothing improper about Sears' deals, which included the sale of hundreds of stores to a company called Seritage Growth Properties, which Lampert created in 2015.
Lampert's offer, which was submitted by a subsidiary of ESL, will keep about 400 stores open and about 45,000 of Sears' workers employed.
The bid must get approval by the US bankruptcy court at a hearing on February 1. If it's approved, the transaction is expected to close on February 7.