Sears Threatened to Sue Illinois Over Tax Credit Dispute
Sears Holdings Corp. CEO Edward Lampert said the struggling department store chain is “fighting like hell” — and that includes its dealings with the state of Illinois, public records show. The Chicago Tribune reports the company threatened legal action in a months-long battle over $14.8 million in state tax credits Sears believed it earned in 2016 before it fell short of the minimum employee count required to qualify for future incentives. Sears and the state settled that dispute in December 2017, with the state granting Sears the 2016 tax credits and the company agreeing not to seek incentives for its 2017 fiscal year. In total, Sears qualified for $51.3 million during the three years it was eligible to earn the tax breaks under an incentive deal inked in 2011 — after Sears threatened to move its Hoffman Estates, Ill.-based headquarters out of state.
Total Retail's Take: This feels like deja vu. Between the 401(k) class-action lawsuit last summer, its ongoing legal battles with Craftsman tools, and recent shareholder lawsuit (where CEO Eddie Lampert and the company's board of directors allegedly stripped the company of its best assets to benefit himself and his hedge fund), I'm left wondering what will be the straw that breaks the camel's back? We've been talking about Sears’ struggles for years now. At this point, the retailer must do everything in its power to re-establish its once strong reputation.
The tax credit lawsuit with Illinois is one of many Sears is currently dealing with. With its recent struggles, the department store chain has been forced to cut employees amid structural changes to save money. At this point, Sears is in full-on survival mode.