The Wall Street Journal reports that Sears Holdings, which used to own Sears, has gone to court to demand the repayment of $57.5 million from Eddie Lampert’s hedge fund - the money, it says, represents “credit card and cash proceeds from sales made at stores after the closing of the sale to Mr. Lampert, as well as remaining cash in bank accounts and a portion of February rent paid.”

Lampert’s ESL Investments acquired 425 Sears and Kmart stores last month for $5.2 billion, positioning the purchase as the company’s only chance for survival.

According to the story, “The request from old Sears comes days after Mr. Lampert’s new Sears, known as Transform Holdco LLC, made public the dispute between the two companies and called for a mediator to step in. The new Sears says old Sears has breached the asset purchase agreement by intentionally delaying payments to vendors and shortchanging the new owner on promised inventory.”

The new company says that it is willing to go to a mediator to work out the dispute, but the old company says that the “call for mediation to settle disputes is just an attempt to add further distractions to the process, and will delay the filing of a chapter 11 plan … Without the payment, the old Sears said it will be unable to pay lawyers and advisers - which cost millions of dollars - and added that withholding the money ‘is jeopardizing the debtors’ ability to timely file a chapter 11 plan withholding these funds’.”

KC's View: I have to be honest about the fact that I did not realize that despite the acquisition of the 425 stores, Lampert, according to the Journal, “refused to assume $166 million in liabilities, while old Sears said it wouldn’t move forward with the deal absent that condition. U.S. Bankruptcy Judge Robert Drain allowed the hedge fund to move forward with the purchase without resolving the dispute.

“In court papers filed last week, new Sears said the dispute remains outstanding and is holding up its ability to move forward with carrying out its obligations under the sale agreement.”


Is it just me, or are these some of the most annoying people and companies one can imagine?

Not as bad, of course, as the folks who ran and used the services of The Key Worldwide Foundation, of course, where they promise to “partner with your son or daughter to identify their strengths, unlock their potential, choose the right college, position themselves for admission, and outline a course of study and extracurricular experiences to lead to a life of success.” But pretty annoying.

By the way … The Key’s website is still up, and you can see it here. Just for fun, of course, if you’re looking for a distraction from Sears’ B.S…