Eddie Lampert, former Sears CEO, has reportedly requested a bankruptcy judge to renounce him from paying nearly $43 million in severance since the company couldn’t hand over assets worth hundreds of millions of dollars.
As per trusted sources, Lampert had agreed to compensate employees who were laid off at stores during October 2018 and February 2019. Meanwhile, Sears Holding Corp. had applied for Chapter 11 bankruptcy in October, but in February, a federal judge permitted the firm to sell its major remainder assets to Lampert to avoid liquidation.
In a court filing, Lampert claimed that he was not obligated to pay up to $43 million in severance because Sears was unsuccessful in handing over assets worth hundreds of millions of dollars it had agreed to in the February deal. Moreover, Transform Holdco LLC, the company set to acquire Sears assets, paid around $128 million it wasn’t supposed to pay and was owed extra $20 million, Lampert added.
Sears estate suspected that Lampert was delaying to avoid the payment for assets he had previously agreed to take on. Moreover, in April, the bankrupt estate had launched a lawsuit against Lampert for stripping the retailer of assets worth over $2 billion, further contributing to the company’s collapse, cited credible sources.
According to sources familiar with the matter, the 110-page complaint filed with the US Bankruptcy Court in New York also points fingers at some of the former Sears directors as convicts in the looting. The names include Steven Mnuchin, U.S. Treasury Secretary, and Lampert’s former college roommate, as well as several executives of ESL Investment, which bought the bankrupt retailer in a deal worth $5.2 billion earlier this year.
The company has closed over 3,500 stores in the years before it filed for bankruptcy, with around 400 Sears and Kmart stores running at the moment, reported sources.