Synchrony Says Walmart's Complaint Baseless, Intends To Defend Position

(RTTNews) - Responding to the lawsuit recently filed by Walmart Inc. in United States District Court for the Western District of Arkansas, Synchrony Financial (SYF) said Thursdat that it believes Walmart's complaint is completely baseless and without merit, and it intends to vigorously defend its position.

Synchrony said that the lawsuit is nothing more than an attempt by Walmart to exert leverage and avoid the contractually defined process for valuing the loan portfolio that Synchrony has serviced on behalf of millions of Walmart customers for the last 20 years. It is unfortunate that, despite good faith efforts to resolve this commercial dispute amicably and in accordance with the contract, Walmart walked away from discussions and rushed to file suit.

Ultimately, Walmart is trying to avoid paying the fair market value for the portfolio as required by contract, Synchrony said.

Synchrony applied the same underwriting and decision-making processes to the Walmart portfolio as it does to all portfolios. The credit performance of the portfolio was simply driven by the credit distribution of the applicants, the relative performance of Walmart cardholders and Walmart's failure to promote the program.

While it would have preferred to resolve this matter commercially, Synchrony said it intends to file substantial claims that will demonstrate Walmart failed in the most basic elements of contract, including its promotion of the card program both in stores and online.

Synchrony said, "While this is clearly an attempt by Walmart to avoid paying the fair market value for the portfolio, we are committed to enforcing the terms of our contract."

Earlier today, Walmart Inc. filed a lawsuit against its longtime credit-card issuer Synchrony Financial, alleging the lender breached terms of its contract with the retail giant.

The lawsuit alleged that some of Synchrony's underwriting standards financially harmed Walmart . The merchant said it is seeking damages "in an amount to be proven at trial but estimated to be no less than $800 million."

Synchrony was Walmart's exclusive credit-card issuer for nearly two decades until Walmart told Synchrony this summer it would replace the card issuer with Capital One Financial Corp.
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