Bid to save Sears Canada keeps retailer alive
If proposal to rescue portions of chain is not accepted, liquidation may start Oct. 19
Sears Canada executive chairman Brandon Stranzl has put together a bid to save a portion of Sears Canada that includes financial backing, but if it fails, the entire chain could begin liquidation as early as Oct. 19.
Stranzl’s bid, which has yet to be approved, does not include Sears stores at Fairview Mall, Scarborough Town Centre, Oakville Place and Lime Ridge Mall in Hamilton, which are part of a parcel of properties returning leases to landlords and being liquidated.
Another 59 stores have already been liquidated.
An estimated 7,000 jobs could be saved if the bid is accepted, said Dan Murdoch, the Stikeman Elliott lawyer representing the group working on the bid led by Stranzl.
No further details of the Stranzl bid, which was submitted late Tuesday, before a Wednesday court hearing on the insolvency, were made public.
A person close to the matter said between 8,000 and 10,000 jobs could be saved and the deal involves about 60 stores. The deal has the financial support of Blackstone Group and Goldman Sachs, the insider said, adding that initially, the Fairview store and Scarborough Town Centre store were part of the bid.
Lawyers representing stakeholders in the case — including those representing employees and retirees — expressed concern in court on Wednesday about how long the process is taking. The longer it drags on, the costlier the process becomes, leaving less money for creditors.
A court date has been set for Oct. 13 and if the bid to save Sears is not accepted by then, the plan is to begin liquidating stores on Oct. 19 or Oct. 26 at the latest.
Mark Zigler, one of the Koskie Minsky lawyers representing 15,000 Sears employees in the pension plan, said a decision must be made soon on whether Sears can continue operating in a reduced format or will liq- uidate whatever hasn’t been already purchased.
“We cannot continue to keep funding this exercise,” Zigler said. He said he remains hopeful the pensioners will be able to recover a portion of the pension fund’s $280-million deficit.
Susan Ursel, a senior partner at Ursel Phillips Fellows Hopkinson LLP, representing an estimated 14,000 active Sears employees and 3,500 former employees, said her clients are anxious for a resolution. “If I could say one thing — the employees are the unsung heroes in this — they are toiling hard to keep this company in the best possible circumstances it can be to give it the best possible chance of success,” Ursel said.
In all, 145 different buyers expressed an interest in parts of Sears, including competing retailers, landlords and institutional real estate investors, according to documents filed in court.