NEW YORK — A former Sears, Roebuck & Co. executive has filed a lawsuit in an Illinois state court alleging that the retailer wrongfully withheld severance benefits owed to him.
Kevin Keleghan, who was president of Sears’ credit division until Oct. 4, filed the suit in Lake County Circuit Court in November. In addition, Keleghan said that chief executive officer Alan Lacy defamed him.
Keleghan’s discharge from Sears was made public when Lacy told Wall Street analysts that he “lost confidence” in Keleghan. At the time, Lacy was discussing the rising delinquency rate in the chain’s $30 billion credit card portfolio.
Sears ended up adding $222 million to its loan loss provision. The disclosures about the credit card division caused a sell-off of shares of Sears’ stock.
A spokeswoman for Sears said: “We did file a response in court. We feel that the company acted appropriately in the departure of Kevin Keleghan.”
Sears, as an affirmative defense, said in its court filing that the retailer was “fraudulently induced” to enter into an executive severance-noncompete agreement with the former executive, who asked “Sears to execute it without disclosing to Sears facts that plaintiff feared would lead to his termination.”
The agreement was signed one month before the former executive was fired.