Ex-Sears CEO Eddie Lampert trying to avoid paying millions in severance to laid off workers: reports
Former Sears CEO Eddie Lampert is asking a bankruptcy judge to relinquish him from paying up to $43 million in severance because the bankrupt retailer failed to hand over hundreds of millions of dollars of assets, reports said.
Lampert had agreed to pay compensation for employees who were laid off at stores between October 2018 and February 2019, USA Today reported. Sears Holding Corp. filed for Chapter 11 bankruptcy in October, but a federal judge agreed in February to allow the company to sell the major remaining assets to Lampert as a last-minute deal to prevent liquidation.
Lampert said in a court filing Tuesday that he was not obligated to pay up to $43 million in severance because Sears failed to hand over "hundreds of millions of dollars of assets" it had agreed to in the February deal, USA Today reported. Lampert said Transform Holdco LLC, the vehicle to launch new Sears, paid at least $128 million it didn’t have to pay and was owed another $20 million.
Sears estate alleged Lampert was stalling to avoid paying for assets he had agreed to take on, The Wall Street Journal reported.
In April, the bankrupt estate had filed a lawsuit against Lampert for allegedly stripping the retailer of more than $2 billion worth of assets, contributing to the company's downfall.
The 110-page complaint filed with the US Bankruptcy Court in New York also names a slew of former Sears directors as culprits in the looting. Those include Lampert’s former college roommate, U.S. Treasury Secretary Steven Mnuchin, as well as several executives at the billionaire’s hedge fund, ESL Investment, which acquired the bankrupt retailer in a $5.2 billion deal earlier this year.
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Lampert previously said he used his own fortune to save the retailer from liquidation and help thousands of people remain employed.
Sears had closed more than 3,500 stores in the years before it filed for bankruptcy. There are now about 400 Sears and Kmart stores left.
Fox Business' Jade Scipioni contributed to this report.