Sears is suing Lampert and the US Treasury Secretary
The Sears/Eddie Lampert soap opera is getting weirder because Sears is suing Lampert and US Treasury Secretary Steven Mnuchin.
Specifically, Sears Holding Corp’s current management accuse Lampert, Mnuchin, and hedge fund ESL Investments of looting the retail legend, Reuters reports. Moreover, the suit claims Lampert; Sears’ former CEO, is responsible for the company’s “death spiral” into bankruptcy.
The plaintiffs include Sears’ current management and creditors. Not surprisingly, the suit seeks to recover “billions of dollars of value looted from Sears.”
The plaintiffs name Mnuchin because he was an investor and board member at ESL Investments, USA Today reports. To explain, ESL Investments is Lampert’s hedge fund. However, Mnuchin is merely the biggest name among a dozen defendants.
The lawsuit is part of Sears’ ongoing Chapter 11 Bankruptcy case, The Chicago Tribune reports. The United States Bankruptcy Court for the Southern District of New York is hearing the Sears’ case.
Management accuses Lampert and Seritage of looting Sears
Other defendants include; ESL President Kunal Kamlani, and fund manager Bruce R. Berkowitz, and his Fairholme Capital Management. In addition, the plaintiffs are suing Lampert’s real estate investment trust Seritage Growth Properties (NYSE: SRG).
The plaintiffs name Seritage because it took ownership of 266 Sears’ stores in 2015. Moreover, Seritage can sell those stores to growing retailers like Amazon’s Whole Foods, the TJX Companies (NYSE: TJX), Aldi, and Kroger (NYSE: KR).
Notably, Amazon (NASDAQ: AMZN) could buy 110 Sears and Kmart locations for additional Whole Foods Market stores, PMNTS.com claims. Thus Seritage can make money by selling or leasing empty Sears and Kmart stores to other retailers.
Thus, circumstances support the lawsuit’s allegations that Lampert and other insiders were conspiring to strip Sears of assets. The stripping allegedly includes hundreds of millions of dollars in rent…
