Sears Canada reaches compromise over pension payments, health benefits as company restructures

A Sears Canada outlet is seen Tuesday, June 13, 2017 in Saint-Eustache, Quebec. .
A Sears Canada outlet is seen Tuesday, June 13, 2017 in Saint-Eustache, Quebec. . The Canadian Press/Ryan Remiorz

TORONTO – A court-appointed monitor says Sears Canada, its lenders and lawyers for employees have reached a compromise that could allow the company to continue paying certain health benefits and special pension payments up to the end of September.

A monitor’s report filed this morning was prepared for a hearing at the Ontario Superior Court, which granted Sears Canada temporary protection from creditors three weeks ago.

READ MORE: Sears Canada files motion to suspend retiree benefits

Sears Canada had initially asked permission to immediately halt payments for health and dental benefits for former employees, retirees and surviving spouses as well as the company’s special payments to the Sears Canada pension plan.

However, lawyers representing Sears Canada employees asked the court to reinstate or continue the health benefits until October as the company restructures under court protection from creditors.

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READ MORE: Here are the 59 Sears Canada stores set to close and where you can expect liquidations

In separate documents filed by the company’s lawyers, Sears Canada’s chief financial officer says that it’s “crucial” to begin liquidation sales of inventory no later than July 21 and to be completed by Oct. 12.

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