The Welland Tribune

Sears Canada’s court monitor opposes priority for pensioners over other creditors

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TORONTO — A court-appointed monitor for the Sears Canada bankruptcy process says it opposes a proposal that would effectivel­y allocate all the failed retailer’s remaining assets to the company’s underfunde­d pensions.

FTI Consulting argues in a Sept. 7 filing to Ontario Superior Court that the pension proposal should be dismissed due to legislatio­n and case law.

A petition filed with the court in July by the pensioners claimed about 18,000 Sears retirees should have first claim on assets to reduce a roughly $260 million shortfall in their pension plans.

However, Sears Canada had only about $158.3 million on hand plus a few properties that remain to be sold — meaning none of the company’s other unsecured creditors would receive anything if the pensioners get first priority.

If the pension motion fails, the remaining assets will be divided up proportion­ately among all classes of unsecured creditors.

FTI says it’s opposing the pension motion through its role as monitor — a sort of umpire assigned to help a judge sort out conflictin­g claims — in part because it doesn’t appear any of the other unsecured creditors is in a position to challenge it.

It says the other creditors are primarily small businesses and individual­s including former employees, retirees, contractor­s, vendors and customers with warranty claims.

The department store chain’s last stores closed on Jan. 14.

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