Creditors set Oct. 7 deadline for Sears Canada to enter liquidation
04/10/2017 21:24
TORONTO, Oct 4 (Reuters) - Creditors to Sears Canada have
set a deadline of Oct. 7 for the retail chain to enter
liquidation agreements for all its assets, leaving the company
with just days to reach a deal to continue operations, a
court-appointed monitor said.
That tight deadline presents a challenge and could
potentially derail negotiations with the executive chairman
Brandon Stranzl, who stepped away from day-to-day operations of
Sears Canada to come up with a proposal to keep the 65-year-old
company running.
A lawyer for Sears Canada and a company spokesman both
declined to comment.
Stranzl submitted a revised proposal, lawyers for Stranzl
said. Reuters was not able to reach Stranzl immediately.
Stranzl's bid presents "significant closing risk and
uncertain recovery," FTI consulting the court-appointed monitor
said in a report on its website this week.
Sears Canada has steadily lost market and struggled to
remain relevant to shoppers who have switched to stores that
keep up with fast-changing fashion trends. Sears Canada's sales
have fallen every quarter since it was spun off from Sears
Holdings in 2012. urn:newsml:reuters.com:*:nL3N1JA471.
Sears must agree to liquidate all its assets by Oct. 7 to
receive payments from its creditors to ease a growing liquidity
crunch, according to the latest amendment to an agreement
between the company and its creditors.
Liquidation is a court-based procedure under which the
assets of a company are sold and the funds distributed to the
company's creditors.
The company, which in 2012 was spun off from U.S. retailer
Sears Holdings Corp SHLD.O , filed for creditor protection in
June and laid out a restructuring plan that included cutting
2,900 jobs and closing roughly a quarter of its stores.
The company must seek court approval on the liquidation
agreements on Oct. 13 and begin the process on Oct. 19 according
to the amendment posted on the website on Tuesday night.
On Wednesday, the company won court approval to close 11
stores and extend creditor protection, which was to end on
Wednesday, until November 7.
(Reporting by Nichola Saminather and Solarina Ho; Editing by
Andrew Hay)
((denny.thomas@thomsonreuters.com; +1 416 687 7697; Reuters
Messaging: denny.thomas.thomsonreuters.com@reuters.net))
Keywords: SEARS CANADA/