Sears Holdings Corp., the estate of the former retail titan Sears, has agreed to settle a lawsuit over the $5.2 billion sale of its Sears and Kmart chains to former chairman and CEO Edward Lampert for more than $18 million, the Chicago Tribune reports.
In June, Transform Holdco, a company whose majority owner is ESL Investments, a hedge fund overseen by Lampert, bought most of Sears’ remaining assets, including 425 stores.
Problems with the transaction “arose before the ink even dried on the contract,” according to filings with the U.S. Bankruptcy County in the Southern District of New York and reported by the Tribune.
Sears says Transform had failed to give them about $57 million, while Transform accused Sears of not delivering inventory it was guaranteed as part of the sale, the Tribune reports.
Transform, which is the current owner of the Sears and Kmart chains, agreed to pay $18.3 million to the department store’s estate, about $13 million of that figure in cash, according to the article.
“Those funds could go to creditors who weren’t fully repaid after the company’s bankruptcy,” reports the Tribune.
In October 2018, Sears filed for bankruptcy protection and announced plans to close the first of hundreds of stores.
In February, Hardware Retailing spoke with noted Sears historian Jerry Hancock about the retailer’s rise to prominence and subsequent stumble.