Sears Holdings creditors may finally get a payday via new settlement agreement

Insurers, shareholder funds and former CEO Eddie Lampert to supply funding

Chicago – Though the payouts may be relatively meager, some relief could be coming for suppliers left holding the bag when Sears Holdings filed for bankruptcy four years ago.

Last week, Sears Holdings and its one-time creditors said they have reached a settlement, according to multiple reports. The $175 million settlement arose from a suit against former CEO and majority owner Eddie Lampert and other investors, who plaintiffs accused of steadily stripping assets from the company in the years preceding its Chapter 11 filing.

The settlement requires approval from the federal bankruptcy court.

Retail Dive reports the Sears Holding settlement would be funded through three entities: $125.6 million from insurers, $41.9 million from the defendants and $7.5 million from shareholding funds.

What remains of Sears Holdings was acquired by Lampert-controlled Transformco in 2019. Although e-commerce operations continue, there are fewer than two dozen Sears and Kmart stores locations in operations today.

See also:

Kmart closes the last store in its original home state


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