Sears is suing a top tool vendor it says is refusing to honor its contract with the retailer.
The lawsuit follows through on threats that Sears CEO Eddie Lampert made in a blog post on Monday.
Lampert said One World Technologies was trying to "embarrass" Sears and "take unfair advantage" of the retailer by changing the terms of its supplier agreement or threatening to cancel its contract with Sears altogether.
One World Technologies is a subsidiary of China-based Techtronic Industries that manufactures power tools and other products under the Craftsman brand.
The lawsuit, filed on Monday, claims that the tool vendor threatened to cancel its contract with Sears because of concerns about the retailer's financial stability unless Sears agreed to cut back its orders, the Chicago Tribune reported.
Sears says it has always paid its suppliers on time and claims One World Technologies is trying to take advantage of negative rumors and media reports about Sears' viability to change the terms of its contract.
"We will not simply roll over and be taken advantage of," Lampert wrote in the blog post.
He said One World planned to file a lawsuit against Sears "as they seek to embarrass us in the media to force us to let them out of their contract. But Sears has nothing to be embarrassed about — we have lived up to our word under our contract, and we will take the appropriate legal action to protect our rights and ensure that One World honors their contract."
Sears' stock fell 12% after the blog post was published.
One World Technologies and Techtronic Industries did not immediately respond to a request for comment.
Lampert said Sears had helped One World "build a formidable presence in the tool industry" over their nine-year relationship. He said Sears had paid the company more than $868 million since 2007.
SEE MORE: Inside Sears' death spiral: How an iconic American brand has been driven to the edge of bankruptcy
Last week, Lampert told the Chicago Tribune that some vendors had been treating Sears like a "pariah" and questioning its ability to pay for orders "because there are a lot of articles that are speculating, and there are elements of truth, but they're certainly designed to scare people."
"If you're a vendor and want to do business with us, then you have to treat us like a customer," he said. "You don't treat us like a pariah."
Sears' sales have been cut in half since 2007, and the company has been closing hundreds of stores and selling off assets including real estate and brands like Craftsman to raise money. The company has also been borrowing money from Lampert's hedge fund, ESL Investments, to keep funding operations.
There has been widespread speculation on Wall Street that the company is nearing bankruptcy, especially after Sears in March revealed "substantial doubt" about its ability to stay in business.
