Dollar Tree has filed a motion to dismiss a lawsuit brought against it by private equity firm Sycamore Partners, stating it was a “disingenuous attempt to deflect attention away from another of [Sycamore’s] retail failures.”
In documents filed with the Delaware Chancery Court on Monday, the discount retailer said Sycamore Partners “failed to invest the required capital” into the Family Dollar stores its portfolio company Dollar Express acquired, or to make the most basic preparations for its operation as a long-term business.
“Worse, Sycamore siphoned cash out of the company, leaving it unable to meet its basic business needs,” the documents said.
Sycamore Partners and Dollar Express brought the lawsuit against Dollar Tree in June on the grounds Dollar Tree schemed to put Dollar Express out of business.
Sycamore declined to comment on the development.
Dollar Tree itself is suing Sycamore Partners and Dollar Express, alleging that the private equity firm breached the terms of an agreement formed as part of an acquisition made by the portfolio company.
The filing, also brought in June, said Dollar Express bought 330 Dollar Tree stores, which continued to operate under their original brand name, but they ran into difficulty and some stores were liquidated.
“[This] made Dollar Tree look bad,” a source close to the matter told pfm at the time.
In a joint statement published in June, Dollar Express and Sycamore Partners said the claims were “without merit.” The firms declined to comment further on the status of the case.