ESL-Sears Bankruptcy Brawl Gets Examiner on Contested Millions

(Bloomberg) -- The federal judge overseeing the bankruptcy of Sears Holdings Corp. appointed an examiner in the ongoing fight between the bankrupt estate of Sears and the ESL Investments Inc. unit that bought the company out of bankruptcy, according to a new court filing.

Lawyers for the estate and the ESL subsidiary that bought the retailer, Transform Holdco LLC, haven’t been able to agree on three issues including the value of inventory the estate handed over to Transform when the sale closed.

Michael Wyse, the managing director of Wyse Advisors LLC, will calculate final figures for the prepaid inventory shortfall, cash reconciliation and the specified receivables shortfall, according to the filing.

Transform previously said the prepaid inventory shortfall was at least $72 million. U.S. Bankruptcy Judge Robert Drain ordered the estate and Transform to cooperate with Wyse and comply with any requests for documents or information.

The two sides have been engaged in an ugly fight since shortly after the $5 billion sale was approved in February. The Sears estate sued ESL founder Eddie Lampert in April for allegedly transferring billions of dollars in company assets when the retailer was insolvent.

Lampert sued the estate the following month for allegedly failing to deliver “hundreds of millions of dollars of assets” called for by the sales agreement.

The case is Sears Holdings Corp., 18-23538, U.S. Bankruptcy Court, Southern District of New York (White Plains)

To contact the reporter on this story: Josh Saul in New York at jsaul15@bloomberg.net

To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Dawn McCarty, Allan Lopez

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