Target, investors agree to pay $166 million Mervyn's settlement

A bankruptcy judge has signed off on a settlement under which the creditors of the now-bankrupt Mervyn's, the former Target Corp. clothing subsidiary, will collect a $166 million settlement from Target, private equity firm Cereberus Capital Management and about 40 other investors, the Star Tribune reports.

Author:
BMTN Staff
Updated:
Mar 8, 2018
Original:
Nov 6, 2012

A bankruptcy judge has signed off on a settlement under which the creditors of the now-bankrupt Mervyn's, the former Target Corp. clothing subsidiary, will collect a $166 million settlement from Target, private equity firm Cereberus Capital Management and about 40 other investors, the Star Tribune reports.

Minneapolis-based Target sold Mervyn's in 2004 to an investment consortium. The California-based clothing retailer filed for bankruptcy four years later.

Unpaid creditors claim the investment firms stripped usable real-estate assets and forced Mervyn's into bankruptcy, U.S. News reports.

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After three years, Target Corp. is replacing the Christmas Champ, the crazed Target lady in a red jumpsuit played by Minnesota-native Maria Bamford, with the Deals Duet. The Business Journal reports the Minneapolis-based retailer will debut its holiday marketing campaign on Wednesday.

Minneapolis-based Target Corporation has joined a growing list of more than two dozen retailers who object the propposed multi-billion dollar deal to settle a seven-year class-action lawsuit, Twin Cities Business reports. More than 7 million merchants claim Visa, MasterCard and some of the nation's largest banks fixed the fees they charge to retailers on credit card transactions. A Minneapolis-based law firm filed the case in 2005 and announced the agreement earlier this month. The class-action settlement still requires a judge's approval.

Toronto-based TD Bank Group will acquire Target's consumer credit card portfolio for nearly $6 billion, according to a company news release. The Minneapolis-based retail giant has also entered into a seven-year agreement under which TD Bank will underwrite, fund and own future Target Credit Card and Target Visa receivables in the U.S.

Shares for the Minneapolis-based discount retailer have surged 130 percent since late 2009 -- up 20 percent since the beginning of 2012. The Star Tribune writes Target's P-Fresh grocery format, Red Card program and exclusive merchandising partnerships have led to higher traffic and bigger purchases per visit. Four top executives, including CEO Gregg Steinhafel, have reaped millions of dollars by selling some shares.

Minneapolis-based Target Corp. inked a deal for Radio Shack to operate mobile phone kiosks at stores nationwide in 2009, but the agreement hasn’t been great for the Texas-based consumer electronics chain. One analyst tells MarketWatch that Radio Shack's Target business is losing millions of dollars and thinks Radio Shack should consider ending the partnership. The two retailers appear to be working on improvements, including placement in Target circulars.

The Minneapolis-based discount retailer says a key sales figure rose 7.3 percent in March. Target says the strongest performers included food, household essentials, clothing and health care items. Electronics were among the weakest.

A study from Internet research firm comScore suggests advertising on the social-networking platform may help boost sales. The study found people who are friends or fans of Target on Facebook were 21 percent more likely to shop at the Minneapolis-based discount retailer than those not exposed to the company's messages.

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