A decade ago, Sears Holdings was a sprawling retailer with thousands of stores under the Sears and Kmart brands, along with major property holdings and valuable owned brands. By the time it filed for bankruptcy, many of Sears Holdings’ stores had closed, major assets — including property, beloved products brands and retail banners such as Sears Canada — had been sold or spun off.
Those sales and spinoffs are the heart of the lawsuit against Lampert and other defendants. Lampert and his hedge fund, ESL Investments, invested in and often took controlling stakes in many of the divested assets, including Sears Canada, Lands’ End and Seritage Growth Properties (which included a large portfolio of Sears Holdings’ real estate).
In their complaint, the plaintiffs alleged that “[a]ltogether, Lampert caused billions of dollars of cash and other assets to be transferred to himself, Sears Holdings’s other shareholders and other third parties.”