Creditors are sifting through the smoking ruins of Sears Holdings Corp.’s bankruptcy to question whether any of Eddie Lampert’s deals involving the bankrupt retailer were improper, Bloomberg News reported. Lampert, a billionaire who controls nearly half of Sears stock, has had interests on both sides of significant transactions the past few years. He remains the retailer’s chairman after resigning on Monday as chief executive officer, and he’s also chairman of the retailer’s spinoff, Seritage Growth Properties, which collects rent from 230 Sears and Kmart stores. Lampert and his hedge fund, ESL Investments Inc., have loaned Sears $2.66 billion in a dozen different ways. “Things may get contentious early on,” said Jeffrey Pierce, managing partner at Snow Park Capital Partners, a hedge fund that has had a short position on Sears stock. “There are many large payments being made out of Sears to entities Lampert has material economic interests in, such as Seritage.” ESL floated a plan last month to restructure the 125-year-old retailer and keep it out of bankruptcy, where it falls under a judge’s scrutiny. The plan was rejected by other creditors. Sears filed for chapter 11 on Monday with about $11 billion in liabilities and $7 billion in assets. It said it plans to shutter 142 stores. Read more.
Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.
