Sears: Lands’ End split ‘fraudulent’

Did the 2014 spinoff of Dodgeville-based Lands’ End Inc. from Sears constitute a fraudulent transaction? A lawsuit filed by Sears Holdings Corp. against former Lands’ End CEO Eddie Lampert and others claims that Lampert transferred billions of dollars of Sears’ assets to its shareholders which drove Sears into bankruptcy, according to a report in Chain Store Age, a retail publication.

Sears filed for bankruptcy last October and a judge approved the $5.2 billion sale of Sears’ assets to Lampert’s hedge fund, ESL Investments Inc., in February.

According to the lawsuit, “As Sears was sliding into bankruptcy, Eddie Lampert — its long-time controlling shareholder, chairman, and chief executive officer — in concert with and assisted by other defendants, transferred billions of dollars of the company’s assets to its shareholders for grossly inadequate consideration or no consideration at all.

“By far the largest share of the value siphoned from the company went to Lampert himself, ESL, the hedge fund he controls, and other insider defendants,” the lawsuit continues.

ESL Investments denies the charges.