Private Equity Firms Allegedly Doomed Mervyn's To Failure

Private Equity Firms Allegedly Doomed These Guys To Failure
HAYWARD, CA - OCTOBER 17: The exterior of a Mervyn's store is seen October 17, 2008 in Hayward, California. Mervyn's, a popular department store chain, announced today that it will close its doors and liquidate its 149 stores with huge 'going out of business' sales. The retailer filed for Chapter 11 bankruptcy protection in July of this year. (Photo by Justin Sullivan/Getty Images)
HAYWARD, CA - OCTOBER 17: The exterior of a Mervyn's store is seen October 17, 2008 in Hayward, California. Mervyn's, a popular department store chain, announced today that it will close its doors and liquidate its 149 stores with huge 'going out of business' sales. The retailer filed for Chapter 11 bankruptcy protection in July of this year. (Photo by Justin Sullivan/Getty Images)

The private-equity firms behind the disastrous leveraged buyout of Mervyn's will cough up $166 million to settle allegations that they doomed the department store chain to failure.

Sun Capital Partners and Cerberus Capital, along with other defendants, were sued in 2008, when the 59-yearold company was forced to liquidate after a failed turnaround effort.

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