Wednesday, April 24, 2019

Lampert and Mnuchin sued by Sears, a tale of the Retail Apocalypse

When I wrote Sears and KMart avoid liquidation, a tale of the Retail Apocalypse last February, I knew that wouldn't be the end of the story.  Sure enough, Newsy reported last week Sears sues ex-CEO, Mnuchin for alleged thefts.

The lawsuit alleges "[Eddie] Lampert caused more than $2 billion of assets to be transferred to himself and Sears' other shareholders."
CNBC has more.
Sears on Thursday lodged a lawsuit against its former CEO Eddie Lampert and a string of its high-profile past board members, including his former Yale roommate Treasury Secretary Steven Mnuchin, for allegedly stealing billions of dollars from the once-storied retailer.
Why am I not surprised that Mnuchin used to be Fast Eddie Lamprey's roommate?  Turns out they stayed close, as RawStory reported that Mnuchin sat on Sears Holdings board from 2005 until he became Treasury Secretary.  Fast Eddie even attended Mnuchin's confirmation hearing.

Back to CNBC
Sears’ unsecured creditors repeatedly argued that Lampert was the cause of, not the solution to, Sears’ downfall. They believe that Lampert, along with Sears’ biggest shareholders, unduly benefited from deals that occurred under Lampert’s watch, including its spinoff of Lands’ End in 2014, and the carve out of many of its best properties into Seritage Growth Properties, a real estate investment trust Lampert created a year later.
I'm not surprised at this, either.

So who else was named in the suit?
The suit names numerous defendants besides Lampert and Mnuchin, including two high-profile directors: Bruce Berkowitz, a hedge-fund manager who was a large investor in Sears, and Kunal Kamlani, president of ESL.
And how has Mnuchin responded?
Mnuchin, who resigned from the Sears board when he was nominated to head Treasury, wasn’t immediately available to comment.
If Mnuchin has no comment, I have one from the President, quoted by RawStory.
“Sears has been dying for many years,” Trump told reporters while departing for a tour of the damage wrecked by Hurricane Michael.

“It’s been obviously improperly run for many years and it’s a shame,” Trump added.
Improperly run by his Treasury Secretary and his college roommate — "only the best people."  Ha!

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