(CNN) — The owner of Sears told two prominent Democratic lawmakers that former workers who lost their jobs got their severance after the company went bankrupt.
Last month, Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez asked Eddie Lampert, Sears’ owner, demanded he pay the severance and explain why he is fighting a court battle over who picks up the tab.
In a letter Thursday, Lampert replied that the dispute over who is responsible for the severance payments doesn’t make a difference to the former workers: They have already been paid. He says he just wants the bankrupt remnants of Sears to pick up the tab. Lampert posted the letter on Medium. The letter was first reported by CNBC.
According to Lampert, Sears Holdings, the company that Lampert ran until it filed for bankruptcy in October, made the severance payments.
Lampert’s hedge fund ESL bought more than 400 Sears and Kmart stores in a bankruptcy auction in February. Lampert said the purchase saved 45,000 jobs.
He said at the time that the “new Sears” would pay severance to any of those employees who get laid off going forward. But he said he wanted “old Sears” (the still bankrupt assets) to pay him back for the severance to former employees.
“This is entirely an issue between Old and New Sears,” Lampert wrote on Thursday. “To our knowledge, the eligible employees whose employment was terminated by Old Sears prior to our acquisition have received all severance due to them. No severance has been put ‘at risk’ by New Sears.”
Warren told CNN she is not satisfied with the response.
“We need to know the involvement of all the parties: what was said, what was done, when it was done,” she said. “These corporate raiders think they can come in and suck out all the value of the business and leave the workers and pensioners with nothing while they line their own pockets and that’s just wrong.”
The company had more than 68,000 workers when it filed for bankruptcy, but only about 45,000 by the time it emerged from bankruptcy in February. Some of the workers who had lost their jobs in store closings just before the bankruptcy filing also had their severance payments cut off because of the bankruptcy case.
Lampert had filed a motion in bankruptcy court last month arguing that because he didn’t get all the assets promised to him by “old Sears” during his purchase, his obligation to pay for the severance was negated. That prompted the letter than Warren and Ocasio-Cortez sent to him demanding that he pay the severance.
“The failure to make those payments would amount to a broken promise on your part, and a betrayal of hard-working Sears employees-some of whom have worked at the company for decades-who are relying on the severance that they have been promised,” Warren and Ocasio-Cortez said in their letter.
Spokespeople for the bankruptcy attorney for Sears Holdings, the old company that continues to exist in bankruptcy court, did not immediately respond to a request for comment from CNN Business. Nor did press people for Ocasio-Cortez.
Lampert’s letter asks that he have the opportunity to discuss the issues related to Sears and its employees with the elected officials. He said he couldn’t say how many stores it new Sears may have to close in the future, because that will be based upon individual store performance.
“We prioritize keeping people employed,” he said. “To the extent our business efforts at Old Sears did not succeed, that lack of success was not due to a venal plot to steal its assets, but rather to a number of factors, including a terrible environment for brick and mortar retailers and legacy pension liabilities. Unlike many other situations where private equity owners simply allowed companies to fail, ESL supported the company for years.”
— CNN’s Ted Barrett contribute to this report.
™ & © 2019 Cable News Network, Inc., a Time Warner Company. All rights reserved.