Sears CEO To Pay $40 Mln To Settle Shareholders Lawsuit

(RTTNews) - Sears Holdings Corp.'s CEO Eddie Lampert and his hedge fund have agreed to pay $40 million to settle a shareholder lawsuit that alleged Lampert benefited from a deal to spin off the struggling chain's best assets.

The lawsuit claims that the real-estate investment trust Seritage Growth Properties, which was created by Lampert in 2015, benefited from a deal to spin off 235 of Sear's best stores.

After spinning off Seritage, Lampert and Sears board made a deal in which Sears sold 235 stores, including many of its most profitable locations, to Seritage, thus raising a much needed $2.7 billion in cash. Sears then rented back the store space from Seritage.

However, as the lawsuit claims, Seritage had right to over all or half of the square footage of many stores and it rented the empty space to other retailers at about four times the rent.

The lawsuit alleges that Lampert benefited by standing on both sides of the transaction and that the Sears stores were worth far more than $2.7 billion.