Sears boss may have profited, cred­i­tors say

USA TODAY International Edition - - MONEY - Nathan Bomey

Sears Hold­ings chair­man and in­vestor Ed­die Lam­pert may have profited from the com­pany’s plunge into bank­ruptcy, a group of cred­i­tors al­leged Tues­day.

A com­mit­tee or­ga­nized to rep­re­sent the re­tailer’s un­se­cured cred­i­tors in court ac­cused Lam­pert and his hedge fund ESL In­vest­ments of po­ten­tially struc­tur­ing deals to gain an un­fair edge as the com­pany de­clined.

They “may have ex­er­cised un­due influence to siphon value away from the Com­pany on fa­vor­able terms,” the cred­i­tors group said in a court filing.

The group also said Lam­pert may have lever­aged his “in­sider sta­tus to ob­tain an ever-in­creas­ing per­cent­age” of Sears debt, al­low­ing him to “ob­tain beneficial po­si­tions” in the re­tailer’s Chap­ter 11 bank­ruptcy.

Sears rep­re­sen­ta­tives de­clined to com­ment. Lam­pert’s rep­re­sen­ta­tives were not im­me­di­ately avail­able to com­ment.

USA TO­DAY re­ported in June that Sears was giv­ing Lam­pert and his funds about $200 mil­lion to $225 mil­lion per year in debt pay­ments.

Lam­pert, who served as CEO from 2013 through the com­pany’s bank­ruptcy filing last month, ex­tended bil­lions in financ­ing to Sears. He also holds own­er­ship stakes in var­i­ous as­sets for­merly owned by Sears, in­clud­ing valu­able real es­tate spun off in 2015 into a real es­tate in­vest­ment trust called Ser­itage Growth Prop­er­ties.

The Ser­itage deal was par­tic­u­larly sus­pi­cious, the un­se­cured cred­i­tors group al­leged. The cred­i­tors group is ask­ing a judge to force Sears to give up doc­u­ments re­lated to the deals in ques­tion, in­clud­ing $2.4 bil­lion in debt held by Lam­pert through his in­vest­ment funds, in­clud­ing ESL.

Sears filed for Chap­ter 11 bank­ruptcy pro­tec­tion in Oc­to­ber.

Ed­die Lam­pert

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