Sears has landlords from hell.
That’s what billionaire Eddie Lampert’s hedge fund ESL Investments is telling a bankruptcy court, complaining that big mall owners have been pushing for Sears to liquidate instead of reorganizing in Chapter 11 so they can “profit” off of its abandoned stores, according to court filings.
“Indeed, the landlords have stated publicly in recent days that their profitability will be enhanced by a Sears liquidation,” ESL said in a filing late Tuesday.
In particular, ESL takes aim at mall operators Simon Property Group and Brixmor Property, accusing their CEOs of putting their interests ahead of other creditors’.
“We are going to be able to make money on [Sears’ bankruptcy],” Simon Property CEO David Simon said in an earnings call last month, adding that his company is “putting Sears in its rearview mirror,” the filing said.
Meanwhile, Brixmor CEO James Taylor said his company will “capitalize quickly on this opportunity,” in an earnings call, the filing said. A Brixmor spokeswoman said ESL did not provide an accurate characterization of Taylor’s comments.
Both Brixmor and Simon are among the nine members of the unsecured creditor’s committee, which said last week in court papers that Sears is burning through too much cash to emerge from bankruptcy as a viable company.
They object to a bidding process that would auction off a group of 400 Sears and Kmart stores instead of allowing them to go dark.
Simon did not immediately return calls for comment.
Lampert believes Sears has a future as a smaller chain and hopes to acquire some 400 stores at an auction.
Credit: Source link