WILMINGTON, Delaware (Reuters) - Billionaire Eddie Lampert must pay $18 million to shareholders of Sears Hometown and Outlet Stores Inc for short-changing them in 2019 when he bought out minority investors in the company he controlled, a Delaware judge ruled on Wednesday.
Vice Chancellor Travis Laster, the judge on Delaware's Court of Chancery, said Lampert owed $1.78 per share plus interest to Sears Hometown investors, who received $3.21 per share under the deal.
Laster said Lampert used his power as a majority shareholder to buy the company on the cheap after thwarting a company plan to liquidate its ailing Hometown business to focus on its stronger Sears Outlet stores.
A special committee of the board had estimated the value of the liquidation plan was $9.58 per share.
Laster determined after a three-day trial that Lampert benefited from the potential to sell off the Hometown business.
"Taken as a whole, that evidence indicates that the controller paid a price for the bad business’s inventory that was below the range of fairness."
An attorney for Lampert did not respond to a request for comment.
Sears Hometown was spun out of iconic department store chain Sears Holdings in 2012.
Lampert took control of Sears Holdings in 2005, after merging it with the Kmart discount chain.
The hedge fund manager struggled for years to stem the losses of the company that had pioneered mail-order catalog shopping but never found its footing in the internet era.
Sears filed for bankruptcy in 2018 and Lampert bought the company out of Chapter 11 the following year and then acquired Sears Hometown.