Sears Holdings Corp. and a group of unsecured creditors are suing the retailer’s former CEO Edward Lampert along with several board members including current Treasury Secretary Steven Mnuchin for allegedly stealing billions of dollars from the retailer.
According to a CNBC report, the lawsuit claims that Lampert was the cause of Sears’ downfall and that he and several of the retailer’s largest shareholders benefitted from deals that took place while Lampert was running the company.
This, the report said, includes the spinoff of Lands’ End in 2014 and the carving out of the company’s best properties into a real estate investment firm created by Lampert, Seritage Growth Properties.
The lawsuit claims that Lampert caused more than $2 billion of assets to be transferred to him and other shareholders that were beyond the reach of Sears creditors. Other claims in the lawsuit include Sears employees, allegedly at the direction of Lampert, produced financial plans that offered “bad-faith predictions that the company would experience an immediate and dramatic turn-around” financially.
A spokesperson for ESL Investments disputed the claims in the lawsuit, calling them baseless allegations.
In February, Lampert purchased most of Sears assets, which included the DieHard and Kenmore brands, for $5.2 billion following a bankruptcy auction.