‘TO­TAL SHOCK’

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

The Guardian (Charlottetown) - - FRONT PAGE - BY LINDA NGUYEN AND DAVID PADDON

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.

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