The US Supreme Court has declined to hear a case aiming to overturn Sears’ 34-year-old lease at the Mall of America, meaning the retailer’s symbolic $10 annual rent deal remains intact despite its bankruptcy.
The U.S. Supreme Court has declined to hear a case brought by the owners of the Mall of America aimed at overturning a decades-old lease agreement with the now-bankrupt retailer Sears. This decision means that the 34-year-old lease, which allows Sears to pay an annual rent of just $10, will remain in place.
The Mall of America, located in Bloomington, Minnesota, is the largest shopping mall in the United States. Its owner, the Triple Five Group, had sought to invalidate the lease signed by Sears in 1991. Sears had secured the lease for approximately 160,000 square feet of space spread over three floors at a highly discounted rate as part of its status as a major department store chain, a key driver of foot traffic for the mall.
According to Rudy Milian, president and CEO of retail consultancy Woodcliff Realty Advisors, “In the 1970s and 1980s, mall developers gave super-cheap and sometimes rent-free leases to department stores for several reasons.” Milian also noted that the Mall of America opened in 1992 featuring major department stores such as Nordstrom, Macy’s, Bloomingdale’s, and Sears. He described the presence of Sears as “a coup” for the mall’s developers, Melvin Simon and Associates (a predecessor to Simon Property Group), who partnered with Triple Five Group to build the massive complex.
The litigation surrounding this lease began about five years ago following Sears’ bankruptcy filing in 2018. Since then, the situation has become increasingly complex due to the bankruptcy proceedings and subsequent corporate restructuring. Sears closed its Mall of America location in 2019 as part of a wider series of store closures.
Two years ago, the Supreme Court allowed Triple Five Group to contest the transfer of the lease to Transform Holdco, a company created by former Sears CEO Eddie Lampert and other post-bankruptcy shareholders. Lampert’s fund, ESL Investments, had acquired Sears assets for $5.2 billion in 2019. Transform Holdco inherited the lease for the former Sears space in the Mall of America as part of this transaction, leading to ongoing legal challenges.
However, with the Supreme Court’s recent refusal to hear the case, the lower court’s December ruling by the Second Circuit Court of Appeals stands, preserving the enforceability of the lease for what is effectively a century-long term.
This ruling means the Mall of America remains bound by the terms first agreed over three decades ago, retaining the 100-year lease at the symbolic rate of $10 per year, despite the evolving retail landscape and the bankruptcy-related changes in ownership of Sears’ assets.
Source: Noah Wire Services
- https://www.scotusblog.com/2023/04/court-rules-in-favor-of-mall-of-america-in-dispute-over-sears-lease/ – This article explains the Supreme Court’s decision in a dispute involving the Mall of America and Sears’ lease transfer, highlighting the nuances of bankruptcy law. It corroborates the complex legal history surrounding Sears’ bankruptcy and the lease.
- https://www.mlexwatch.com/real-estate-authority/commercial/articles/2328079/justices-won-t-hear-mall-of-america-s-sears-lease-dispute – The U.S. Supreme Court declined to hear a case brought by the Mall of America regarding its dispute with Sears over a lease agreement. This decision supports the article’s claim about the lease remaining in place.
- https://www.weil.com/articles/weil-wins-complete-second-circuit-victory-for-sears-liquidating-trust – The Second Circuit Court of Appeals ruled that the Sears Liquidating Trust retains ownership of the 100-year lease at the Mall of America. This supports the article’s mention of the lease’s enforceability and the trust’s ownership.
- https://content.next.westlaw.com/practical-law/document/Id6caf967defa11ed8921fbef1a541940/SCOTUS-revives-Mall-of-America-s-challenge-to-Sears-lease-transfer?viewType=FullText&transitionType=Default&contextData=%28sc.Default%29 – The Supreme Court previously allowed the Mall of America to contest the transfer of the lease to Transform Holdco. This highlights the legal challenges and decisions that have shaped the lease’s status over time.
- https://www.abi.org/newsroom/daily-wire/sears-landlord-wins-big-supreme-court-appeal-but-has-nothing-to-show-for-the – Although the landlord of a large Sears store won a significant appeal, the ownership of the Sears store remains with the Sears chapter 11 trust. This supports the claim that despite legal victories, the Mall of America didn’t gain control over the lease.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative references recent Supreme Court decisions (2024 time frame) and bankruptcy actions starting in 2018 through 2019, indicating current relevance. The Mall of America lease dispute has been ongoing with recent court rulings preserved. No indication of recycled or outdated content was found.
Quotes check
Score:
8
Notes:
The direct quote from Rudy Milian about mall leasing practices is presented as expert commentary. Searches show no earlier exact matches online, suggesting it could be original for this piece, supporting its authenticity. The quote aligns historically and contextually with known mall leasing practices.
Source reliability
Score:
7
Notes:
The narrative originates from a commercial real estate news platform (Bisnow), which is known for industry-focused reporting but is less high-profile than mainstream global outlets. It generally provides reliable, specialist-driven content though with less editorial oversight than major international agencies.
Plausability check
Score:
9
Notes:
The details about Sears’ bankruptcy, lease terms, and Triple Five’s legal challenges are consistent with known facts about Sears’ retail decline and Mall of America history. The longevity and nominal lease align with common commercial real estate strategies for anchor tenants. No claims appear exaggerated or unsupported.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is timely, consistent with recent legal events, includes credible expert commentary with likely original quotes, and fits with the known context of Sears and Mall of America lease history. While from a specialised real estate news outlet rather than a top-tier global publisher, the account is plausible and well supported.
