Sears, Roebuck and Co., a wholly owned subsidiary of Sears Holdings Corporation (NASDAQ: SHLD), today announced the company has reached a preliminary agreement to settle class action litigation brought on behalf of purchasers of Sears, Roebuck securities during the period from October 24, 2001 through and including October 14, 2002 that had been pending in the United States District Court for the Northern District of Illinois and captioned In re Sears, Roebuck and Co. Securities Litigation, No. 02 C 07527. The litigation concerned statements made by Sears Roebuck concerning its credit card business during the class period. Sears, Roebuck sold that business in November 2003.
"As we move forward, Sears Holdings believes it is important to put this matter behind us so that we can continue to focus on building a great retail company," said Aylwin Lewis, chief executive officer and president of Sears Holdings.
Under the settlement, Sears, Roebuck is required to make a payment of $215 million. The company has made claims under relevant insurance policies, and expects that, after giving effect to anticipated insurance proceeds, the cash payment for settlement by Sears, Roebuck will be approximately $85 million on a pre-tax basis. Because Sears Holdings had established a reserve for the expected settlement by Sears, Roebuck, the settlement is not expected to have an effect on earnings. The settlement is subject to judicial approval.
In agreeing to the settlement, the company did not admit any wrongdoing and denies committing any violation of law. The company agreed to the settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation.
The settlement will resolve all claims asserted concerning the credit card business disclosures, other than claims asserted under ERISA or relating to SRAC notes, which are described in Sears Holdings' Report on Form 10-K for the fiscal year ended January 28, 2006.
Public notices detailing the settlement and providing more information will be printed in major newspapers across the U.S. and in a notice to be distributed to class members after approval of the court.
This press release contains forward-looking statements about the Company's expectations regarding the resolution and outcome of pending litigation, including statements concerning the expected impact on the Company's earnings of any settlement. Statements preceded by, followed by or that otherwise include the word "expects" and similar expressions or future or conditional verbs are generally forward-looking in nature and not historical facts. These forward-looking statements are based on assumptions about the future that are subject to risks and uncertainties, and actual results may differ materially from the results projected in the forward looking statements. Risks and uncertainties include the possibility that the court does not approve the settlement or other factors outside the control of the Company. The Company intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more information becomes available.
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,900 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. The company is the nation's largest provider of home services, with more than 13 million service calls made annually. For more information, visit Sears Holdings' website at http://www.searsholdings.com/ .
SOURCE: Sears Holdings Corporation
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
Web site: http://www.searsholdings.com/