Sears Canada Creditors Zero In On Lampert Payments

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Sears Canada Inc. creditors are targeting Eddie Lampert, its former controlling shareholder and the chief executive of its U.S. namesake Sears Holdings Corp., over payments he received before the Canadian business collapsed last year. A group of unhappy pensioners served court papers Friday in Ontario’s Superior Court of Justice asking for the appointment of a trustee in Sears Canada’s bankruptcy proceeding for the purpose of digging up additional funds for creditors, The Wall Street Journal reported. The proposed trustee would scrutinize nearly $3 billion in shareholder dividends paid out since 2005, of which Mr. Lampert and his hedge fund ESL Investments Inc. were “major beneficiaries,” according to the papers. Installing a trustee is a popular tool for creditors to try to claw back prebankruptcy payments through lawsuits or settlements. Lou Brezezinski, a lawyer representing former Sears Canada showroom dealers, said the trustee would target Mr. Lampert specifically, in particular his share of a $509 million distribution in December 2013. “We’re going after him,” Mr. Brezezinski said in an interview. Read more. (Subscription required.)