(Bloomberg) -- President Donald Trump said that Sears Holdings Corp. had been mismanaged for years before it declared bankruptcy. Among those responsible for its management: his Treasury secretary.
Steven Mnuchin was a member of Sears’s board from 2005 until December 2016, and before that was a director for K-Mart Corp., which was acquired by Sears in 2005.
“Sears has been dying for many years,” Trump told reporters as he departed the White House on Monday to inspect hurricane damage in Florida. “It’s been obviously improperly run for many years and it’s a shame.”
Treasury didn’t immediately respond to questions about Mnuchin’s service on the company’s board.
Mnuchin was a college roommate of Sears Chairman Eddie Lampert, who attended Mnuchin’s confirmation hearing for Treasury secretary in January 2017. Mnuchin cut his ties to Sears when he joined the Trump administration.
Mnuchin said during his Senate confirmation hearing in January 2017 that he had invested about $26 million in Lampert’s hedge fund, ESL Investments Inc. He defended Lampert’s management of Sears, which he said “was already a failing issue” before Lampert invested in the company.
As Treasury secretary, Mnuchin sits on the board of the Pension Benefit Guaranty Corporation, which considers applications from companies to terminate their pension plans. During the hearing, Mnuchin told Senator Bob Menendez, a New Jersey Democrat, that he would recuse himself if the PBGC receives an application from Sears. Menendez noted that would leave the PBGC board with just two voting members.
“I’m not sure that the remaining two can ultimately make a decision on such a case which involves 200,000 people’s pensions,” Menendez told Mnuchin.
The retailing icon filed for chapter 11 bankruptcy protection on Monday and said it will attempt to reorganize around a smaller number of profitable stores. Lampert resigned as CEO, but he is negotiating a financing deal with the company.
“Somebody that is of my generation, Sears Roebuck was a big deal,” Trump said. “So it’s very sad to see.”
(Updates with Mnuchin comments on Sears beginning in 6th paragraph.)
--With assistance from Katherine Burton and Sonali Basak.
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