Liquidation deadline approaching for Sears

Process could start Oct. 19

TORONTO Sears Canada could begin a full liquidation of the business as soon as Oct. 19 as the clock runs down on an offer from executive chairman Brandon Stranzl.

Stranzl, who made his latest revised bid for the firm Tuesday night, is the only potential buyer of the distressed retailer’s assets who wants to run the retailer as a going concern.

But it appears he has little time left to strike a bid with Sears and its advisers, as the lenders who have kept the money-losing business afloat since June will ask Ontario Superior Court judge Glenn Hainey on Oct. 13 to approve a liquidation of Sears’s remaining assets.

The process to liquidate locations could start as soon as Oct. 19, with a possible extension to Oct. 26, according to court papers.

“The Stranzl bid may not be executable,” Sears’s lawyer Jeremy Dacks of Osler, Hoskin & Harcourt LLP, told Hainey in a court hearing Wednesday. “We have a very short fuse on a potential liquidation of the company.”

On Tuesday, court papers revealed that Sears is losing millions of dollars a week. Monitor FTI Consulting said that a going concern transaction for Sears could only be pursued if it were done in conjunction with ongoing asset sales aimed at maximizing value for other creditors and stakeholders.

“The lenders have supported this business for a long while,” Joseph Latham, counsel for Wells Fargo, said Wednesday. Those lenders are advocating for a liquidation to start well before Christmas in order to capitalize on the busiest retail season of the year.

Sears Canada’s future has been uncertain since June, when the Toronto-based firm filed for bankruptcy protection, announcing the closure of 59 stores and 2,900 staff layoffs.

On Wednesday, Justice Hainey granted Sears’s sale of the appliance chain Corbeil, its SLH transport division, three of its home services businesses, the sale of 12 Sears stores, and the sale of a distribution centre to Indigo Books and Music.

Hainey also extended Sears’s court-approved protection from its creditors until Nov. 7.