Sears and ex-workers deliberate on appointing trustee to review payments
Ex-workers upset payments were made to shareholders while their pension fund was short
Lawyers representing former Sears Canada workers and their ex-employer are trying to reach an agreement on whether a trustee should be appointed to review $3 billion paid to shareholders even as the retailers business was in decline.
The appointment is a request from the ex-workers, who are upset the payments were made while their pension fund was short nearly $300 million.
The opposing parties deliberated behind closed doors at Ontario Superior Court in Toronto on Thursday.
The workers claim the bulk of the $3 billion was paid to Sears Canada's largest shareholder U.S. hedge fund ESL Investments and its CEO Eddie Lampert. However, a representative for ESL told the Canadian Press that the company and Lampert only received five per cent of the dividends paid out to shareholders.
Lampert took control of Sears in 2005 and says ESL suffered significant losses from the company's 2017 bankruptcy.
After he and other shareholders were paid by the company, he claims Sears had $500 million in cash available for use and no debt.
Lampert also claims the former employees' $300-million figure is deceitful because it conflates Sears' retirement plan with health, dental and life insurance that he says has gone unfunded since 2008.
In their motion, the workers also say they are owed $400 million for unpaid health and life-insurance benefits.