The judge overseeing the bankruptcy case of Sears Holdings Corp. appointed mediators to help resolve a $2 billion lawsuit against former chairman Eddie Lampert and other former shareholders filed by the retailer’s creditors three years ago, WSJ Pro Bankruptcy reported. Judge Robert Drain appointed Shelley Chapman, a fellow bankruptcy judge in the U.S. Bankruptcy Court in New York, along with James Peck and Jed Melnick, as mediators in the lawsuit, which alleges that Mr. Lampert and his hedge fund stripped key assets like Lands’ End and the Sears Hometown stores out of the company before its chapter 11 filing. Mr. Lampert has denied the allegations and sought to have the lawsuit dismissed. A settlement or monetary award in the litigation is expected to be a key source of recovery for top-ranking creditors of the former Sears, many of them foreign vendors, which are still owed roughly $60 million, according to a January court filing. Judge Drain set a May 23 deadline for the mediation to conclude, though it can be extended, according to Wednesday’s court order. The appointment of mediators comes just over two months before Judge Drain’s scheduled retirement from the bench.
