Eddie Lampert blasts AOC, Warren over 'harsh,' 'false' Sears severance allegations
Sears chairman Eddie Lampert hit back at Massachusetts Democrat Elizabeth Warren and New York Democrat Alexandria Ocasio-Cortez on Thursday, over their inquisition into whether Sears had paid laid-off employees severance.
Lampert responded to claims that he broke promises and betrayed Sears employees, “who are relying on the severance that they have been promised to pay rent, care for children, and put food on the table,” by saying that those reports were “false.”
In a letter obtained exclusively by CNBC – and confirmed as accurate to FOX Business by a source close to the situation – Lampert said the reports referred to a group of people terminated by so-called “Old Sears.” "New Sears" references the company that has emerged after Lampert’s purchase of Sears through Transform Holdco, a part of his hedge fund ESL Investments.
“Our understanding is that those employees have already been paid severance by Old Sears,” Lampert wrote.
At the end of last month, Warren and Ocasio-Cortez sent Lampert a letter criticizing him for backing out of his responsibilities to former workers.
Reports that New Sears was backing out of its obligations, Lampert explained, refer to the fact that Old Sears owes New Sears more than $50 million worth of assets as part of the asset purchase agreement. Lampert said the amount that New Sears owes to its defunct relative is reduced dollar-for-dollar by the amount it is owed. Part of those payments was reimbursement for severance, but Lampert said whether New Sears delivers on those payments is unrelated to whether the employees were paid.
He added that New Sears has paid its severance to former employees as well.
The businessman also defended his tenure as leader of Old Sears, saying its failure was not due to “a venal plot to steal its assets.” He also said job losses at the retailer are not isolated – listing a number of other retailers that have cut employees.
“Singling Sears out and publicly disparaging me and the company because we were not able to successfully transform Old Sears, when so many others have met a similar fate, is unfortunate and unfair,” Lampert said.
Lampert was unable to say whether more stores would be closing in the future.
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A bankruptcy judge approved Lampert’s $5.2 billion plan to save 425 stores and 45,000 jobs in February. At the time, ESL said New Sears would continue to operate as many stores as possible, including new smaller stores.
Lampert said the company has opened three “new smaller-format stores” over the past month.
Sears filed for bankruptcy in October, as it struggled to adapt to the current retail environment, weighed down by debts and liabilities. The company hadn’t earned a profit since 2010.