Wilmington Trust, the agent for PetSmart Inc.’s term lenders, is suing the company and its private equity owners in the latest move in a legal battle over the retailer’s transfer in June of over 36 percent of the shares in its valuable Chewy.com e-commerce business, WSJ Pro Bankruptcy reported. Wilmington Trust said in a court filing that that the transfer of billions of dollars worth of Chewy.com shares violates PetSmart’s bond covenants. The lenders’ countersuit, which names BC Partners co-chairman Raymond Svider as a defendant, alleges that the private-equity firm maneuvered to carve out a chunk of shares in Chewy.com for itself just as PetSmart’s brick-and-mortar operations struggled. The lawsuit claims that the share transfers run afoul of a requirement that the company meet a minimum ratio of earnings to fixed expenses at the time of any such transfer.
