Last month, Mr. Lampert and the Sears board agreed to pay $40 million to settle a shareholder lawsuit claiming
that Sears’s sale and lease-back of much of its most valuable real estate to a real estate investment trust — 43 percent owned by Mr. Lampert and his ESL hedge fund — was a blatant conflict of interest that harmed Sears shareholders.
Last week, Sears Holdings, the parent company, said what was becoming increasingly obvious to most investors, not to mention anyone
who’s been in a Sears store lately: “Substantial doubt exists related to the company’s ability to continue as a going concern.”
Sears said that the statement reflected a new, more stringent accounting rule, and that the company was in no imminent danger of bankruptcy.
Over the last two years alone, Mr. Lampert and ESL have extended Sears over $800 million in loans secured
by Sears assets — nearly two-thirds as much as Sears’s entire market capitalization of $1.2 billion.
Sears has denied any wrongdoing and said it had settled the suit merely to avoid “protracted litigation.”
Mr. Lampert “has stripped Sears of its assets,” Mr. Cohen said.
Although Mr. Lampert probably shows substantial gains on his original investment in Sears
and Kmart, “he and ESL investors can’t have fared very well over the past six or seven years,” Mr. Melich said.