Sears Canada Inc., October 30, 2017
October 30, 2017
Liquidation of Sears Canada is now proceeding
We previously reported that Sears Canada sought court approval to conduct a full liquidation. Liquidation sales have begun and the company is preparing for its wind down. As the pension plan members are a significant creditor group in the CCAA proceedings, we are closely monitoring the liquidation process to ensure that the value of the estate is maximized.
Pension Priority Claim
Given the underfunding in the Sears Canada Pension Plan, we as Representative Counsel to the retirees have asserted that the amount that the company owes to the Sears Pension Plan, including unpaid special payments and the wind up deficit, is subject to a statutory deemed trust priority in favour of all plan members under the Ontario Pension Benefits Act and the Ontario Personal Property Security Act. We have sent a letter to the Monitor and all parties in the CCAA proceedings asserting a first priority claim against the company’s estate on behalf of the pension plan members, which shall be paid ahead of all other creditors (subject only to the CCAA-court ordered charges). To view a copy of our letter, please click here.
Appointment of Replacement Pension Plan Administrator
On October 17, 2017, the Ontario Superintendent of Financial Services appointed the actuarial firm of Morneau Shepell to take over the administration of the Sears Canada Pension Plan. Member inquiries related to individual pension entitlements can be directed to Morneau Shepell at 1-888-841-8956 or by email at firstname.lastname@example.org.
Given the appointment of a replacement pension plan administrator and the fact that the liquidation of the company is proceeding without a going concern solution, we will be discussing the future of the Sears Canada Pension Plan with the Superintendent and Morneau to achieve the best outcome for the pension plan members. We will continue to provide updates as information becomes available.