The bankrupt estate of Sears Holding Corp. won court approval to settle a complex lawsuit against former CEO Eddie Lampert and other investors for $175 million, helping close the chain’s four-year-old Chapter 11 case.

The resolution of the litigation, which involved $2 billion in pre-bankruptcy deals engineered by Lampert and his hedge fund ESL Investments Inc., resolves lingering uncertainty about the estate’s ability to pay creditors according to a plan of the chapter 11 approved almost three years ago.

Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York said he would approve the deal in a virtual hearing on Wednesday, marking what is expected to be the retired lawyer’s last appearance in the case.

The settlement, which was negotiated over several months with the help of three mediators, allows the estate to avoid what would likely be two more years of “complex and therefore costly” legal proceedings, Drain said.

Although the amount of claims claimed “was significantly higher than the amount of the settlement”, these figures are discounted “based on the probability of success”, he said. He noted that the agreement allows the company to pay all administrative and priority claims required under the plan.

However, an order approving the agreement will not be signed for at least 30 days to give all parties sufficient time to review the terms that were added just before the settlement hearing with lender Cyrus Capital Partners LP. said Drain. Cyrus is pursuing an appeal on the priority of his claims against the estate.

The Sears bankruptcy and creditor lawsuits targeted several transactions taken at Lampert’s direction, which allegedly diverted value from the company. The plaintiffs’ claims related to a 2014 spin-off of Lands’ End Inc. to Sears shareholders; a 2015 rights issue to purchase shares of Seritage Growth Properties Inc.; the subsequent sale of real estate to Seritage; and financing arrangements provided to Sears prior to its bankruptcy in 2018.

The settlement ends the remaining disputes related to the sale of Sears to Transform Holdco LLC, an ESL entity. It also allows Sears to make payments under a $97.5 million settlement it has with Pension Benefit Guaranty Corp. in 2019.

The settlement amount includes payments of $125.6 million from Sears insurers, $41.9 million from Lampert and company insiders, and $7.5 million from public shareholder defendants.

Attorney Ira Dizengoff of Akin Gump Strauss Hauer & Feld LLP, representing an official committee of unsecured creditors, called the deal a “monumental achievement” after “years of work”.

The iconic department store chain filed for bankruptcy in October 2018 after years of financial difficulties and billions of dollars in losses.

The case is In re Sears Holdings Corp., Banker. SDNY, No. 18-23538, hearing of 08/31/22.