Summary of the Proceedings
Eaton’s became insolvent in August 1999. Shortly thereafter Justice Farley of the Ontario Superior Court of Justice appointed former employee Carmen Siciliano as the representative of all employees and former employees of Eaton’s, and our firm as the Employees’ Representative Counsel in the insolvency proceedings of Eaton’s. There were approximately 30,000 employees, former employees, retirees, beneficiaries and others who were affected by the insolvency of Eaton’s and who were subject to our representation.
Eaton’s did not restructure and immediately commenced liquidation proceedings similar to a bankruptcy. The vast majority of employees were terminated without being paid termination pay and severance pay and other amounts owing to them by Eaton’s. All employee and retiree health and other benefits were cancelled. The cash proceeds generated by the liquidation of Eaton’s assets, including the sale of Eaton’s to Sears in 1999, were insufficient to pay all creditors’ claims in full.
Our firm’s role as Representative counsel included the preparation of claims on behalf of all employees and retirees of Eaton’s for amounts owing to them by Eaton’s and filing and advancing those claims for payment in the insolvency proceedings of Eaton’s. The claims process was administered by RSM Richter Inc. (formerly, Richter & Partners Inc.) who was also the Liquidator of Eaton’s assets (through the incorporated entity called “Distributionco Inc.”). The employees’ claim that we prepared and filed was one of the highest of all creditors’ claims in the Eaton’s insolvency proceedings.
The total amount of claims filed by all creditors in the estate of Eaton’s was approximately $215,000,000. After negotiations, adjustments, and contested claims hearings before claims officers and appeals to the court, the total amount of the employees’ claim that we prepared and filed for the employees and retirees was settled at approximately $112,500,000. The Liquidator released a series of dividend payments to all creditors, including employees, at the final dividend rate of 53.7¢ on the dollar of claims. The Liquidator released approximately $60,412,000 in dividend payments to the employees and retirees who we represented.
Eaton’s Pension Plans
As of November 18, 1999, Eaton’s stopped administering all of its pension plans. As a result, the Ontario Superintendent of Financial Services appointed PricewaterhouseCoopers Inc. (“PwC”) as the administrator of all Eaton’s Pension Plans, who proceeded to wind up the pension plans.
In 2012, PwC’s pension wind up group merged with Mercer Canada, who is continuing the wind up of Eaton’s Pension Plans.
If you have any questions about the Eaton’s pension plans, please call Mercer at 1-800-431-5711.
In March, 2014, Mercer brought a motion to the Court for authorization to pay the amounts attributable to those individuals to the Accountant of the Ontario Superior Court of Justice. Mercer has advised us that there are 11 pension plan members with entitlements remaining in the Eaton’s Pension Plans that Mercer can’t locate. On April 8, 2014, the Ontario Superior Court of Justice approved the payment of the pension benefit and surplus entitlements for these 11 unlocated plan members of ERAP III to the Accountant of the Superior Court of Justice.
If you believe you are entitled to these amounts please contact Mercer at 1-800-431-5711.
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