Sears Estate Retains $10 Annual Lease for Mall of America Store

A $10-per-year sweetheart lease for the former three-story Sears department store location at Minnesota’s Mall of America is property of the retail chain’s bankruptcy estate, a federal appeals court said.

The exceptionally below-market 100-year lease, provided to Sears when it became an anchor tenant at North America’s largest mall in 1991, shouldn’t revert back to the lessor because it isn’t a “true lease” under bankruptcy rules, the US Court of Appeals for the Second Circuit ruled Monday, affirming a lower court decision.

Sears had prepaid its rent for the first 30 years while paying taxes and other costs associated with ...