May 31, 2019

Senator Warren, Rep. Ocasio-Cortez Press Investor Eddie Lampert on Reports He Seeks to Renege on $43 Million in Severance Payments to Laid-Off Sears Workers

Warren, Ocasio-Cortez release Lampert's response to a letter sent earlier this year, in which he pledged to fund severance payments for laid-off Sears workers

 Text of the letter (PDF) | Lampert's response to January 2019 letter (PDF)

Washington, DC - Yesterday, United States Senator Elizabeth Warren (D-Mass.) and Representative Alexandria Ocasio-Cortez (D-N.Y.) sent a letter to Eddie Lampert, ex-CEO and Chairman of Sears Holdings, who recently bought the company's assets out of bankruptcy, expressing alarm about reports that he is seeking to back out of an agreement to pay $43 million in severance payments for thousands of dedicated Sears employees who were laid off since the company filed for bankruptcy.

Earlier this year, Sen. Warren wrote to Lampert expressing concern about the future of the company and its tens of thousands of employees, following years of increasing debt, hundreds of thousands of layoffs, and store closings. While detailing serious concerns about Lampert's management of the company, Sen. Warren also wrote in her letter that she was pleased that Lampert's offer to buy the company included a $43 million commitment to pay severance to workers who lost their jobs after Sears filed for bankruptcy in October.

In response to Senator Warren's January 2019 inquiry about Lampert's plan to bring Sears out of bankruptcy, he pledged that "eligible employees of the new Sears will be entitled to the same severance benefits that were put in place following the bankruptcy filing....  In addition, the ESL transaction assures severance payments to employees who lost their jobs after October 15, 2018 and did not join the new Sears."

Warren and Ocasio-Cortez released Lampert's response for the first time today, following this week's reports suggesting that Lampert is no longer planning to follow through on that commitment.

"The new reports of your efforts to avoid paying millions of dollars in severance payments to laid-off workers indicate that you are betraying the commitment you made to Sen. Warren, to the bankruptcy court, and most importantly, to the tens of thousands of workers who have lost their jobs and face uncertain futures after your exploitive tenure at Sears," wrote the lawmakers.

"My store closed in January and I lost my health and life insurance. I couldn't afford to pay for my daughter's education anymore," said Adrianna Perea, a United for Respect leader who worked at Sears in El Centro, CA for 30 years. "Eddie Lampert got to walk away without a single penalty and billions still in his pockets after destroying Sears, upending our lives and leaving most of us without severance."

Warren and Ocasio-Cortez requested more information about how and why Lampert is planning to renege on his promise to pay workers the severance money they have earned. They requested a response to their questions by June 14, 2019.

This is the second letter regarding the Sears bankruptcy Warren and Ocasio-Cortez have sent this month. On May 23, they wrote to Treasury Secretary Steve Mnuchin, questioning his involvement in dubious management decisions during his time as a Sears board member, and the parameters of his recusal from any official Pension Benefit Guaranty Corporation (PBGC) actions related to Sears. They released an explainer video to accompany their letter.