$3B Sears payout will be subject to a court investigation
Back in December, the Canadian Pressed named “The Demise of Sears Canada” as the story of the year. And, it is easy to see why. Every step they took over the past year dug themselves further and further into the ground. Here on HUB Insurance Hunter we have followed the journey the Canadian business took throughout its final months; from hearing that employees were let go without severance while executives were receiving bonuses, to the final liquidation announcement, and all the drama in between.
It seemed like their chapter in Canadian history was over when they closed their final door back in January. But, it looks like we still have a story or two ahead of us. Reported on Monday, a court investigation will be conducted regarding the $3 billion Sears Canada payout.
The investigation was requested by Sears pensioners, in hopes of recuperating some of the money that was lost when the company filed for bankruptcy last year. Some of the pensioners grievances lie with Eddie Lampert, CEO of U.S. hedge fund ESL Investments, who took control of Sears in 2005 and was one of the recipients of some of the $3 billion.
The Canadian Superior Court has appointed a litigation investigator to the case and will review the $3 billion in payments made to Sears Canada shareholders. These payouts occurred at the same time that the company's pension fund saw an almost $300 million deficit.
The litigation investigator chosen is Lax O'Sullivan Lisus Gottlieb and he is charged with the task of looking into the claims and reporting back to a committee of creditors with recommendations about litigation to be pursued.
We’ll be sure to keep you updated on the case here on HUB Insurance Hunter!