Ultra Stores, Filene’s Battle Over Lost Profits

Ultra Stores, which ran the jewelry departments for Filene’s Basement, says the liquidating retailer now owes it $6.3 million in lost profits—but Filene’s attorneys disagree.

The dispute between the one-time partners began in February, when Ultra submitted a “proof of claim” to the U.S. Bankruptcy Court for the District of Delaware, claiming Filene’s is indebted to Ultra for $6.3 million.

The filing notes that the two parties had signed an agreement for Ultra to operate jewelry stores in Filene’s stores until 2016, but Filene’s “breached the agreement” by closing its stores.

However, in a response filed Aug. 27, attorneys for Filene’s called the claim  “contrived” and “baseless,” and argued it “should not be allowed for voting purposes in any amount.”

Filene’s claims that the two sides’ contract precludes Ultra from asserting any “loss, claim, injury, or damage of any kind related to or arising out of the loss of” any of the debtors’ store leases.  

Ultra has said that language only applies to single leases, but Filene’s attorney said it “expressly relates” to multiple-lease situations.  

On Aug. 30, a federal judge okayed the bankruptcy plan for Filene’s, which also includes subsidiary Syms.