Oaktree Capital Accuses BJ’s of Reneging on Tariff Refund Trade
(Bloomberg) — Oaktree Capital Management LP filed a lawsuit against BJ Wholesale Club Inc., alleging it reneged on an agreement to sell its rights for 70 cents on the dollar for about $29 million in tariff rebates.
In a lawsuit filed in New York on Monday, Howard Marks’ asset management giant said BJ’s withdrew from its binding agreement with Oaktree because the “market value” of the tariff demand exceeded the agreed-upon sales price.
“This is a case of illegal and malicious seller’s remorse,” he said of the Oaktree case. BJ’s did not immediately respond to a message seeking comment.
The dispute underscores the rising value of tariff refund claims amid growing optimism that importers will get some of the money back. Most of President Donald Trump’s global trade tariffs were struck down by the U.S. Supreme Court in February. Shortly after the decision, refund claims began trading at over 40 cents on the dollar; this rate was between 10 and 20 cents at the beginning of the year.
Oaktree claims it entered into a “fully negotiated” final agreement on March 13 to pay BJ’s $20 million for its tariff rebate claim. All that remained for the agreement to be enforced was for the members’ club warehouse retailer to use “all commercially reasonable efforts” to return the agreement to Oaktree, according to the lawsuit.
The lawsuit alleges that one of BJ’s in-house lawyers told Oaktree on April 14, a day after the target execution date, that everything was “determined entirely by internal approvals on our end.” However, this changed a day later when the same lawyer sent another email.
“I’m sorry, but please ignore my previous email,” BJ’s lawyer allegedly wrote. “I have given up on the gun and there is an issue we need to work on regarding final approval. I will contact you as soon as I have more information.”
The attorney later wrote on April 15 stating that BJ had implemented the Withdrawal provision in the contract. Oaktree claims this was never intended to be a “one-way cancellation option.”
After the Supreme Court decision, the struggle for refund began. The 6-3 decision did not address the issue of reimbursement and left it to lower courts to decide.
Last week, Customs and Border Protection launched an online portal for importers to seek refunds on $166 billion in tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA). The Supreme Court concluded that the president had exceeded his powers under the law.
Refunds could begin to be issued to thousands of importers in the next few months.
–With help from Irene García Pérez.
More stories like this available Bloomberg.com
