https://amp.usatoday.com/amp/2667949002
Longtime Sears boss and investor Eddie Lampert orchestrated a "multiyear and multifaceted scheme" to strip the company of assets and capitalize on its decline, a group of the retailer's major creditors alleged.
Lampert, who remains chairman of Sears and was CEO until the company filed for Chapter 11 bankruptcy in October, presided over the closure of more than 3,500 stores and the loss of about 250,000 jobs, according to a scathing filing Wednesday by unsecured creditors.
The creditors are hoping to persuade a federal judge to force Sears to liquidate instead of accepting the latest offer by Lampert's hedge fund ESL Investments to keep a shrunken version of the company alive.
They took the unusual step of filing a 136-page history of what they called "Sears' tragic descent from giant to ghost."
Lampert "engaged in serial asset stripping" of the company after taking control in 2005 following the company's tie-up with Kmart, the creditors said. "Lampert was hopelessly conflicted as he presided over Sears' descent into insolvency and into a persistent state of liquidity crisis."
The creditors – a group that includes major mall owners such as Simon Property Group – also accused current Sears leaders of having "capitulated" to Lampert by allowing him to "steal the remaining assets" in a bankruptcy auction.
It's not unusual for unsecured creditors to protest a bankruptcy restructuring plan, which typically leads to steep losses for them. But this one comes after years of criticism by independent experts of Lampert's dealings.