Sears Holdings has been warned of a legal action after allegedly refusing to stay more than $40 million of outstanding debt using its garment suppliers in Bangladesh.
Lawyers for 19 factory owners are demanding that Transformco, a privately held company owned by by American billionaire Eddie Lampert’s ESL Investments hedge fund, are demanding immediate payment amid claims that Transformco “willingly misrepresented” its finances to convince suppliers to extend it credit.According to lawyers, a lot more than $21 million of their clients’ products have already been shipped and so are being placed by Transformco’s carriers in U.S. ports.
They further declare that following Transformco’s acquisition of Sears in January 2019, the company’s executives, abetted by third-party sourcing agents such as for example Triburg Consultants and Li & Fung, “induced suppliers all over the world to extend huge amount of money of trade credit.” Transformco, the legal representatives added, has “now led the suppliers over a financial cliff that has jeopardized their businesses and impacted the jobs of a large number of their workers” who face “severe hardship and even starvation” because of what they call a “breach of contract.”
For that reason, Transformco action’s have “contributed to an evolving humanitarian disaster in Bangladesh and elsewhere in Asia,” the legal representatives wrote.
Transformco has been given till June 8 to respond. If the problem is still unresolved, the legal representatives say their clients may seek Transformco’s involuntary bankruptcy for non-payment of debts.
Following criticisms that factories were being reopened prematurely, the BGMEA says it’ll open a laboratory in Bangladesh to test workers for COVID-19. The facility, run by the BGMEA and the Diabetic Association of Bangladesh, will test up to 180 samples daily from Saturday. Another two laboratories for personnel are slated to open soon, Huq said.
