Sears Holding Corp. is at the center of a new lawsuit alleging the bankrupt retailer failed to pay for its merchandise. The suit was filed by In Gear Fashions, a Miami-based clothing vendor, earlier this week in Cook County Circuit Court and names Sears Holding Corp., CEO Edward Lampert, Lampert's “private equity firm ESL Investments and Kmart, which is a subsidiary of Sears” as defendants. The suit was filed mere days after the now bankrupt retailer filed for “Chapter 11 bankruptcy protection on October 15.”In Gear Fashions has been in business with Sears since 2012 and in its suit, the company alleges that Sears Holding Corp. owes In Gear Fashions “$839,968.75 for merchandise and charges the company with breach of contract, unjust enrichment, and fraudulent misrepresentation.” According to the suit, the vendor “supplied Sears with swim, resort and casual lifestyle clothing that was either sold or kept in Sears’ inventory.” It states:“Allowing the Sears defendants to not pay IGF for the monies owed pursuant to the [contract’s universal terms and conditions] violates fundamental principles of justice, equity, and good conscience.”

Swimwear; image courtesy of stux via Pixabay, www.pixabay.com

According to the vendor, “$182,265.21 of the total amount allegedly owed was supposed to be paid in four installments from Sept. 28 to Oct. 25.” However, on October 12, the payments were allegedly canceled. As if that's not bad enough, the suit also claims “Lampert and his equity firm engaged in a questionable pattern whenever financial woes were brewing at Sears.” For example, “Lampert and ESL Investments would first publicize measures to bolster Sears’ image, then, when those efforts fell flat, would swoop in as the proverbial ‘white knights' to fix the situation,” according to the suit.As a result, In Gear Fashions began to feel as though Sears was making a “fraudulent misrepresentation to the public and to its suppliers” and described Lampert and the other defendants as “having no intention of paying their vendors.” The suit states:“Defendants Lampert, ESL and the Sears defendants knew or should have known that the Sears defendants were facing insolvency.”Upon filing the suit, the plaintiffs are seeking compensatory damages with interest, along with “other relief as may be deemed just and proper by the court.”Prior to the lawsuit, Lampert “repeatedly assured vendors the corporation could be counted on to pay them on time” even as the company began showing signs of weakening. In fact, back in 2014, Lampert wrote a blog post that said:“Across our entire vendor base, we have always met our payment obligations. The steps we are taking to improve our financial strength and reduce our operating losses will ensure that we will continue to be a strong business partner for many years to come.”

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Suit: Sears owes vendor over $800K, falsely represented finances to publicMiami swimwear company sues Sears, Lampert for fraud