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Channel: Breaking Celeb News  

Sears claims Eddie Lampert swiped $57 million from its coffers — and it wants its money back.  The iconic retail chain alleges that the secretive billionaire’s hedge fund ESL Investments, which led it into Chapter 11 last fall, helped itself to tens of millions of dollars from the company’s bank accounts in the days before it closed a $5 billion deal to create a new, downsized Sears chain with 425 stores, according to court documents filed late Monday.  The estate of the old Sears — whose legal bills from white-shoe law firm Weil Gotshal are piling up by the millions every month — is demanding that the cash be returned immediately, lest it get forced into administrative insolvency, the documents show.  ESL “is well aware of the extent to which the debtors have limited resources to engage in protracted litigation,” Sears said in the Monday filing. “The $57 million in funds improperly retained by [ESL] are critical.”  At the Feb. 11 closing of the deal to save the retailer, ESL told Sears that it didn’t have enough time to set up its own bank accounts to operate the new Sears chain, whose legal name is Transform Holdco, according to the filing.  To keep its stores running without a hiccup, ESL asked Sears to give it control of its cash-management systems, court documents say.  Sears claims it agreed to hand over the accounts with the understanding that it would get back the funds, which include credit-card receivables from sales that occurred before the closing, as well as funds from individual store bank accounts and cash from going out-of-business sales.  But since then, ESL has refused to hand over the money. Instead, it’s requesting mediation to settle the matter along with other disputes, involving another $100 million or so of funds.  Sears is asking US Bankruptcy Judge Robert Drain to force ESL to return the funds.  Sears’ pressing debts include vendor payments and sky-high professional fees. New York-based Weil Gotshal submitted a $5 million tab for just 17 days of legal services at the start of the Chapter 11. Judge gives Eddie Lampert second shot at Sears Sears was saved by a judge’s gavel. Bankruptcy Judge Robert...  “The real issue here is that ESL is trying to renegotiate the purchase price after the fact, which will have a severe impact on the vendors and the debtor’s ability to confirm a plan of reorganization,” said Joseph Sarachek, a financial restructuring expert who is representing about six vendors who are owed money by Sears.  ESL, for its part, claims that Sears played dirty at the end, saddling it with more vendor debts. It also claims Sears failed to hand over $147 million worth of prepaid inventory that was promised.  The latter wants the matter to be settled in mediation.  “Transform Holdco LLC is willing to work with the debtors to resolve any disputes expeditiously and believes that a mediator can facilitate that process, help the debtors avoid unnecessary expense and allow us to keep our full focus on turning aroun

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Category: News & Politics
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