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AUTOS : RETAILING | NATION/WORLD

Sears Targeted in Shareholder Lawsuit

April 16, 1997|Bloomberg News

Sears, Roebuck & Co. is the target of a shareholder lawsuit stemming from the retailer's admission that it wronged customers in bankruptcy proceedings. Attorneys for the four law firms that filed the suit in federal court in Illinois declined to say how much they were seeking in damages. Hoffman Estates, Ill.-based Sears, the second-largest U.S. retailer, said it would pay back as much as $400 million plus interest to customers it persuaded to pay their credit card debts after they filed for Bankruptcy Court protection. While creditors are allowed to persuade people to repay their debts, Sears didn't report some of those agreements to bankruptcy judges, as required. The suit, which is seeking class-action status, said Sears' failure to get certain debt reaffirmations approved by the court "artificially inflated" Sears' stock from Oct. 4, 1996, to April 10.

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