Two Sears Holdings board directors have hired investment bank Evercore to scrutinize deals that were led by former Sears Chief Executive Eddie Lampert with the retailer before it filed for bankruptcy protection.
Continue Reading Below
The deals in question involve separating Sears' businesses and real estate and come up during bankruptcy proceedings, according to Reuters.
It is possible creditors may claim the transactions stripped the retailer of valuable assets.
Billionaire Lampert is the largest shareholder and creditor of Sears through his hedge fund, ESL Investments.
ESL has supported the board's decision to authorize the review.
Sears, which filed for Chapter 11 bankruptcy on Oct. 15, and Evercore declined to comment.
Sears directors Alan Carr and Bill Transier, who joined the retailer's board earlier in October, would work with Evercore to examine the deals and decide whether there are grounds for any legal action against Lampert, according to bankruptcy-court papers filed last week, reported by Reuters.
Lampert arranged Sears' merger with discount chain Kmart in 2005.
ESL, in recent years, has extended rescue loans to Sears as it lost billions of dollars and fell behind competitors.
Sears is also trying to secure financing in bankruptcy in an effort to avert liquidation.