Sears Holdings asset purchaser files suit, claims breach of sale deal

By Caroline Salls

Pittsburgh, May 28 – Sears Holdings Corp. asset purchaser and ESL Investments, Inc. unit Transform Holdco LLC filed a lawsuit Saturday against the company in the U.S. Bankruptcy Court for the Southern District of New York “to address a litany of breaches of contract and other wrongs in contravention of the [asset purchase agreement] and this court’s sale order,” according to the complaint.

“The defendants’ course of conduct has imposed undue liabilities on Transform and deprived it of bargained-for assets, funds and other value,” the lawsuit said.

Transform said prompt resolution of the disputes raised in its complaint is important not only to Transform but also to the administration of Sears’ estates as the company seeks to confirm a Chapter 11 plan.

Despite its efforts throughout the sale process to negotiate a deal agreeable to Sears and its commitment to preserving Sears as a going concern, Transform alleged that the company violated the asset purchase agreement “in an attempt to unduly minimize value due to Transform, divert assets that Transform purchased to the defendants’ estates, and impose liabilities on Transform that it did not assume.”

Among other violations, Transform claimed in the lawsuit that Sears has failed to deliver hundreds of millions of dollars of assets that the buyer obtained in exchange for assuming liabilities of the estates, failed to transfer all the real property known as Hoffman Estates, inflicted damage on Transform by intentionally delaying payments to vendors and continued its attempts to shift $166 million in accounts payable liabilities on Transform, despite contrary terms in the sale agreement.

Sears is a retailer based in Hoffman Estates, Ill. The company filed bankruptcy on Oct. 15, 2018 under Chapter 11 case number 18-23538.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.