HOFFMAN ESTATES (dpa-AFX) - Eddie Lampert, the owner of Sears, wants to back out of a promise he made earlier to pay severance to the company's displaced employees.
In court documents filed recently, Lampert has requested a federal judge to relieve him of the obligation to pay up to $43 million in severance.
Lampert has alleged that Sears has not fulfilled its obligation to sell most of it's assets to him and his hedge fund ESL Investments. This includes the amount of store inventory and Sears' corporate headquarters in Illinois.
Lampert is the former chairman and CEO of Sears Holdings. He won a bankruptcy auction for the struggling department store chain earlier this year.
Lampert's bid, valued at more than $5 billion, prevailed over competing proposals from liquidators, paving the way for the 126-year-old retailer to remain open for business.
Meanwhile, Sears Holdings has also filed a lawsuit against Lampert and ESL, saying that Lampert stripped the company off its most valuable assets that could be used to pay creditors.
The latest developments come just as a bankruptcy court hearing involving Sears is due on Wednesday.
Meanwhile, United for Respect, which advocates on behalf of Sears workers as well employees at other retailers, said that it was wrong for Lampert not to pay the promised severance.
Sears employee and United for Respect leader Brenda Urrutia from El Centro, California, noted that Sears had promised one week of severance pay for each year the employees worked at the company. However, she received just four weeks of severance pay when was laid off in January 2019, after 21 years at the company.
'It's not fair that Eddie Lampert and his friends are walking away with billions and now trying to cheat dedicated employees like me from what we were promised,' Urrutia said.
Copyright RTT News/dpa-AFX