Among others, the defendants include Target Corp., and Cerberus Capital Management and Sun Capital Partners, two of the private equity firms to which Target sold Mervyn's four years ago.

The lawsuit was filed on Sept. 2 as part of its bankruptcy case, which was filed on July 29. The story begins four years earlier when a group including Cerberus and Sun Capital acquired Mervyn's from Target for $1.26 billion in a deal that was structured as two separate transactions, one for the real estate and another for the company itself. The lawsuit claims the structure of the deal and the private equity firms' subsequent actions unduly enriched them at the expense of Mervyn's solvency.

"Mervyn's began the day of the closing with more than $1 billion of real estate and, within the blink of an eye, it was gone; Mervyn's received nothing in return," states the lawsuit. "The 2004 transaction is a transaction that ultimately led to Mervyn's bankruptcy and is a fraudulent transfer that cannot withstand scrutiny."