IT services vendor Computer Sciences Corp and retail giant Sears have settled one of the longest-running legal battles in the outsourcing sector.
The two companies went to war over a $1.6bn that they announced in June 2004 under which CSC was going to manage Sears’ IT infrastructure for the next 10 years. But less than 12 months later, the two companies commenced legal action after Sears tried to end the deal without paying the millions of dollars of cancellation fees CSC says it was owed.
Sears told CSC it was canceling the contract for cause but CSC maintained that Sears was only canceling the deal because it was merging with rival retailer K-Mart Holding and wanted to consolidate its contracts without having to pay early termination fees.
But the two companies have issued a statement saying that they have amicably settled their differences on mutually satisfactory terms. Sears will pay an undisclosed amount to CSC. The services company said it does not expect to experience a charge associated with the impairment of assets related to the contract.