‘TOTAL SHOCK’

Former Sears Canada employees fume as company wins approval for sales process

Former employees of Sears Canada fume as company seeks approval for sales process

An Ontario judge has given Sears Canada the green light to immediately proceed with reaching out to potential buyers while it’s under creditor protection.

Ontario Superior Court Justice Glenn Hainey approved the motion for the sale and investor solicitation process Thursday, following hours of discussions between lawyers representing the company, its lenders and retirees and laidoff employees.

According to the decision, the national retailer and its court-ordered monitor, FTI Consulting Inc., can select one or more successful bids by Oct. 25. In separate documents filed by Sears Canada’s lawyers prior to Thursday’s hearing, the retailer’s chief financial officer said it’s “crucial” to begin liquidation sales of inventory no later than July 21 and to complete them by Oct. 12. Hainey is expected to hear that motion Tuesday.

Sears Canada announced in June that it planned on closing 59 locations across the country and cutting approximately 2,900 jobs as part of a restructuring under the Companies’ Creditors Arrangement Act.

The department store owner wants to shutter dozens of stores in the coming weeks while it negotiates with potential buyers who might acquire some or all of the company’s remaining assets, pending court approvals.

“I’m in total shock this happened,” said Zobedida Maharaj, who was one of dozens of former employees who packed an overflowing Toronto courtroom to hear Thursday’s proceedings.

Maharaj, 53, said she had worked at Sears Canada for 28 years before she was laid off at the end of March when her store was closed.

The senior manager of operations and merchandise said she was initially told she would get eight weeks of severance and benefits, but was cut off June 22 when the company secured temporary court protection from creditors.

“It’s like getting slapped in the face,” Maharaj said.

Earlier in the day, Sears Canada struck a deal over benefit and pension payments to retired employees. The retailer had initially asked the court for permission to immediately halt payments for pension, health and dental benefits for laid-off employees, retirees and surviving spouses due to a severe cash crunch, but later agreed to continue payments to retirees until Sept. 30.

Peter Myers, a brother of actor Mike Myers and star of a recent Sears television commercial, also lost his job and was at Thursday’s hearing.

CP PHOTO Peter Myers, brother of actor Mike Myers, speaks with the media as disgruntled Sears employees gather at the Ontario Superior Court in Toronto on Thursday. Lawyers for Sears Canada employees are asking an Ontario judge to have the struggling retailer reinstate or continue their health benefits until October as the company restructures under court protection from creditors.