Former Limited sues for more than $2 million in credit card proceeds

By Caroline Salls

Pittsburgh, June 14 – LSC Wind Down, LLC, formerly Limited Stores Co., LLC, filed a lawsuit Wednesday against private label credit card program administrator Comenity Bank to recover in excess of $2 million the company alleges that the bank improperly retained, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

LSC said its agreement with Comenity required the bank to remit the full amount of the applicable net proceeds to the company and only permitted adjustments to the net proceeds under limited circumstances.

“Beginning on December 23, 2016, the bank, without authority or justification, and in derogation of the agreement and the debtor’s rights, breached the agreement and stopped paying over net proceeds due to the debtor,” LSC said in the lawsuit.

On March 20, Comenity filed a $27.42 million claim against the company for rejection damages, a signing bonus and a marketing contribution.

In addition to seeking recovery of the funds allegedly held by Comenity, LSC is asking the court to subordinate and disallow the Comenity claim and to reclassify portions of the claim.

The court approved LSC’s motion to reject the Comenity agreement on April 10. The company said the agreement has not been terminated.

Limited Stores is a New Albany, Ohio-based retailer of contemporary upscale branded women’s apparel. The company filed bankruptcy on Jan. 17 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 17-10124.

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