Creditors File Motion Challenging Lampert’s Bid for Sears

Attorneys representing Sears’ unsecured creditors filed a motion last week challenging Sears Holdings chairman Eddie Lampert’s $5.2 billion bid to buy the company, USA Today reports. The creditors’ committee claims to have uncovered facts that demonstrate misconduct committed by Lampert and his hedge fund, ESL Investments, which contributed to the retailer’s downfall. The bid needs final approval from a bankruptcy judge at a hearing currently slated for Feb. 1. Sears maintains that the sale will prevent liquidation and preserve 45,000 jobs; however, the creditors allege that the deal is part of a pattern that enriches Lampert by acquiring the company at a discounted rate. The court filing claims Lampert engaged in two controversial and complex financial transactions in which he acted as both lender and borrower. One of those deals occurred in 2015; 235 of the most valuable Sears store properties were transferred to the real estate investment trust Seritage Growth Properties, where Lampert is the biggest shareholder and chairman. According to a public filing, in 2017, Sears paid Seritage $109 million in rent, $43 million in expenses and $35 million in lease termination fees. The creditors would like to recover the value of the properties transferred to Seritage. ESL stated that all business transactions involving Sears were done in good faith and on fair terms with the approval of the Sears Board of Directors.

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