Lampert, Past Board Members, Sued by Sears for Alleged Theft
In the ongoing drama that’s worthy of a midday network TV soap opera time slot, Sears filed a lawsuit late last week against its former CEO Eddie Lampert and a laundry list of former past board members, including Lampert’s old Yale roommate and current Treasury Secretary Steven Mnuchin. The suit alleges that Lampert and co. stole billions of dollars from the once-proud retailer, which filed for bankruptcy this past October.
Lampert, who saved the retailer from complete liquidation by buying it through an affiliate of his ESL Investments hedge fund, had a notably rocky run as the retailer’s CEO and largest shareholder. During the bankruptcy proceedings, Sears’ unsecured creditors repeatedly argued that Lampert was the cause of, and not the solution to, the retailer’s demise. They claim, in the suit, that Lampert and Sears’ other major shareholders “unduly benefited” from deals that occurred under the former CEO’s watch, including the spinoff of Lands’ End in 2014, and the breakoff of many of its best properties into Seritage Growth Properties, a real estate investment trust that Lampert created in 2015.
According to a CNBC report, it was those claims that laid the groundwork for the retailer’s unsecured creditors to legally pursue this suit against Lampert and others on behalf of Sears. And though Lampert had requested to be shielded from potential litigation as part of his deal to buy Sears out of bankruptcy, that request was denied.