SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 1999
SEARS, ROEBUCK AND CO.
(Exact name of registrant as specified in charter)
New York 1-416 36-1750680
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
3333 Beverly Road
Hoffman Estates, Illinois 60179
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 286-2500
Item 5. Other Events.
On February 9, 1999, the registrant issued the press release
attached hereto as Exhibit 99. As reported in the press release,
Sears Bankruptcy Recovery Management Services, Inc. ("SBRMS"),
registrant's subsidiary, has agreed to plead guilty to one count
of bankruptcy fraud and accept a fine of $60 million.
Certain of the statements contained in the attached press release
are forward looking and as such involve risks and uncertainties that
could cause actual results to differ materially. The registrant's
forward-looking statements are based on assumptions about many important
factors, including the Court's approval of the agreement between SBRMS
and the U.S. Attorney. While the registrant believes that its assumptions
are reasonable, it cautions that it is impossible to predict the impact
of certain factors that could cause actual results to differ materially
from predicted results.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The Exhibit Index on page E-1 is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEARS, ROEBUCK AND CO.
Date: February 9, 1999 By: /s/ Alan J. Lacy
ALAN J. LACY
Chief Financial Officer
EXHIBITS
99. Sears, Roebuck and Co. press release dated February 9, 1999.
E-1
EXHIBIT 99
Sears News Release
CONTACT:
Sears Public Affairs
(847) 286-8371
FOR IMMEDIATE RELEASE
Sears Subsidiary to Accept Charge, Fine in Debt Reaffirmation Action
HOFFMAN ESTATES, Ill., Feb. 9 /PRNewswire/ -- Sears Bankruptcy Recovery
Management Services, Inc., a subsidiary of Sears, Roebuck and Co., has
agreed to plead guilty to one count of bankruptcy fraud and accept a fine of
$60 million.
The agreement between Sears Bankruptcy Recovery Management Services, Inc.
and the U.S. Attorney is subject to court approval. A hearing date has not
yet been set.
The anticipated fine will have no effect on Sears earnings. In the second
quarter of 1997, Sears took a pre-tax charge of $475 million against earnings
for refunds, penalties and administrative expenses stemming from improper
handling of certain debt reaffirmation agreements. Likewise, the agreement
does not require any change in the day-to-day operations of Sears or the
subsidiary.
Separately, Sears reached agreement with the U.S. Attorney to settle a
civil action dating from April 17, 1997. Under terms of that agreement, which
also is subject to court approval, Sears and its subsidiary will continue to
file all reaffirmation agreements obtained in Chapter 7 bankruptcies as
required by the U.S. Bankruptcy Code.
The resolution of the United States Attorney's investigation will
conclude the last in a series of legal actions surrounding Sears failure to
file some reaffirmation agreements which the company reached with Chapter 7
bankruptcy debtors. Under the reaffirmation provisions of the U.S. Bankruptcy
Code, a debtor seeking Chapter 7 protection may agree to repay his or her
debts to creditors. This reaffirmation agreement must be filed with the
court to be valid.
In late March 1997, upon learning that the company had not consistently
filed debtors' reaffirmation agreements with the appropriate courts, Sears
senior management immediately directed that all reaffirmation agreements must
be filed in a timely fashion. On April 10, Sears announced a plan to
voluntarily identify and repay with interest Chapter 7 debtors whose
reaffirmations were not filed as required from January 1, 1992 through
April 1, 1997. Through Sears efforts, more than 187,000 affected debtors
were identified and repaid, with interest, all principal, finance charges
and fees they had paid to Sears under terms of invalid reaffirmation agreements.
On June 5, 1997, Sears announced comprehensive settlements that led to
court-approved agreements with all 50 state Attorneys General and class action
plaintiffs, as well as an approved consent order with the Federal Trade
Commission.
Sears, Roebuck and Co. (NYSE: S) is a leading U.S. retailer of apparel,
home and automotive products and services, serving American households
nationwide.
SOURCE Sears, Roebuck and Co.
