States Reach Deal With Sears, Roebuck

Several states, including Washington, announced they have reached settlements with Sears, Roebuck & Co. that will require the retailer to pay $40 million for improperly collecting money from customers whose debts were erased by bankruptcy filings.

Under an agreement filed in June with U.S. Bankruptcy Judge Carol Kenner in Boston, Sears admitted it had failed since 1985 to get judicial approval for repayment agreements with more than 150,000 bankrupt customers.

Sears will pay almost $1.1 million to the state of Washington in civil penalties and fees and repay an estimated $3.8 million to the 4,450 consumers involved in the settlement, Washington state Attorney General Christine Gregoire said Wednesday.