Sears Canada Inc.

• July 13, 2017

  On July 13, 2017, the Ontario Superior Court of Justice (Commercial List) (the “CCAA Court”) approved the terms of a settlement reached between Representative Counsel (on behalf of those retirees, employees and former employees represented), the Ontario Pension Benefits Guarantee Fund (“PBGF”), and Sears Canada in respect of Sears’ motion seeking to immediately suspend the following:

  • Post-retirement benefits including life insurance, medical and dental benefits.
  • Special payments owing under the registered pension plan (the “Sears Pension Plan”);
  • Supplemental pension payments;

  To view a copy of the Term Sheet (being Appendix “A” of the Monitor’s Supplement to the First Report), please click here.

  The settlement provides, among other things, the following:

  1. Continuation of life insurance, medical and dental benefits, up to and including September 30, 2017, subject to further order of the Court;
  2. Continuation of special payment contributions by Sears Canada to the Sears Pension Plan and Supplemental pension payments, up to and including September 30, 2017, subject to further order of the Court;
  3. Subject to certain confidentiality restrictions, the PBGF and Representative Counsel will also be provided with access to certain financial and other information, as set out in greater detail in the Term Sheet.
  4. The settlement also preserves the ability for Pension Representative Counsel to bring a motion before the CCAA Court to seek a wind-up of the Sears Pension Plan and to claim priority as a result of a pension deemed trust and/or administrator’s lien and charge in accordance with the Pension Benefits Act.
  5. In exchange for the above, Representative Counsel and PBGF agreed not to oppose the orders sought by Sears Canada on July 13, 2017 approving the (i) the debtor-in-possession financing and related charges; (ii) the terms of the proposed amended and restated Initial Order and (iii) the Sale and Investment Solicitation Process (“SISP”).

   

• July 11, 2017

  On July 6, 2017, Sears Canada Inc. filed a motion seeking to suspend the following:

  • Special payments owing under the registered pension plan;
  • Supplemental pension payments;
  • Post-retirement benefits including life insurance, medical and dental benefits.

  Based on the material, Sears is seeking to suspend medical and dental benefits as of July 31, 2017 and life insurance will be suspended as of August 31, 2017.

  Representative Counsel is working on a response and will provide information as it becomes available. To view a copy of the motion material please click here.

  The motion will be heard on Thursday July 13, 2017 at 10 am at the Ontario Superior Court of Justice located at 330 University Avenue, Toronto, Ontario in court room 8-1.

• June 23, 2017

  At this time, the company has not made any change to retiree pension or health benefits. However, we are in discussions with the company about its intentions while it is under CCAA protection. We are particularly concerned with the company’s plans for the Sears pension plan and other retiree benefits. We anticipate motions will be brought by Sears for approval to suspend making special payments to the pension plan and to suspend health benefits. The company’s intentions with respect to these matters is set out in the company’s CCAA materials which were filed with the court. We understand that it intends to bring these issues before the court by July 13, 2017.  We are having discussions with the company about their proposed motions and will report to you further.

Toll-Free: 1 800 244 7120

Email: searsrepcounsel@kmlaw.ca