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;
The settlement provides, among other things, the following:
- Continuation of life insurance, medical and dental benefits, up to and including September 30, 2017, subject to further order of the Court;
- 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;
- 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.
- 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.
- 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”).