Suppliers that stocked the shelves during Sears Holdings Corp.’s bankruptcy are being forced to swallow losses and some employees won’t get severance they are owed, even as law firms are guaranteed full payment for their work on the retailer’s chapter 11 case, the Wall Street Journal reported. A year after the storied retailer sold its best stores and assets to ESL Investments Inc., the investment firm owned by former Sears Chief Executive Edward Lampert, the shell left behind in bankruptcy is struggling to pay its debts after racking up more than $200 million in bills from lawyers and advisers. White-shoe law firms Akin Gump Strauss Hauer & Feld LLP, which represents unsecured creditors, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, which represents the independent committee of Sears’s board, have earned more than $50 million. Akin Gump has access to another $25 million set aside to cover the cost of pursuing a speculative lawsuit against Lampert, which is billed as a way to return more money to Sears creditors. Bankruptcy Judge Robert Drain, who approved Sears’s liquidation plan last year, pushed vendors to settle for a maximum of 33 cents on the dollar, with the potential to recoup more if a potential lawsuit against Lampert yields more money.
