Sears (SHLD) lost a breach-of-contract case in state court in Dallas.
The Hoffman Estates, Ill., retailer said it will have to pay a group of institutional bondholders $73.5 million in a 2004 bond redemption case. A jury held that Sears breached its contracts with the group, which includes
Sears said reserving for the award will result in a fourth-quarter charge of $44 million, or 29 cents a share.
Sears said the judge issued a directed verdict in Sears' favor on three of the four counts brought by the bondholder group challenging Sears' redemption of the bonds on various grounds. The judge rejected the bondholder group's claims that Sears made misrepresentations about the bonds in its public filings, that Sears was unjustly enriched by the redemption of the bonds and that Sears was estopped from redeeming the bonds.
Sears said it continues to believe that it was fully entitled to redeem the bonds pursuant to the terms of the bond indenture and that summary judgment or a directed verdict should have been granted on this fourth count as well. The company will request that the trial court grant it judgment notwithstanding the verdict and, if necessary, will appeal the decision.