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 It’s Over for Sears Canada- seeks court approval to liquidate, shutting all its remaining stores

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It’s Over for Sears Canada- seeks court approval to liquidate, shutting all its remaining stores Empty
PostSubject: It’s Over for Sears Canada- seeks court approval to liquidate, shutting all its remaining stores   It’s Over for Sears Canada- seeks court approval to liquidate, shutting all its remaining stores I_icon_minitimeWed Oct 11, 2017 8:33 am

https://wolfstreet.com/2017/10/10/sears-canada-to-liquidate-close-all-stores-lay-off-12000/
SQ-NOTHING THAT WE'VE KNOWN IN THE PAST WILL EVER BE THE SAME AGAIN,AS PEACE IS TAKEN FROM THE EARTH 




It’s Over for Sears Canada

by Wolf Richter • Oct 10, 2017 



Brick and mortar meltdown.

Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to continue operating. Today it said that the restructuring efforts failed, and that it would seek court approval to liquidate, shutting all its remaining stores and laying off its remaining 12,000 employees.
Retailers are notoriously difficult to restructure. Once they’re this deep in trouble, after years of losses, they own few assets and are burdened with debts, as everything has been sold or pledged to creditors. Their suppliers, who’ve been burned too many times, are getting skittish. Lenders are getting desperate. And acquirers can be impossible to find. Most retailer bankruptcies start out as restructurings but end as liquidations.
To stay alive while losing money for years, Sears Canada has sold off most of its real estate holdings, and the most valuable assets are already gone. What’s left are C$1.1 billion ($880 million) in liabilities.
“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” the company said in the statement.
Pending court approval to begin the liquidation process, Sears Canada said that it would kick off liquidation sales at its stores as soon as October 19 and continue through the holiday selling period.
In the bankruptcy filing in June, the company spoke of its “reinvention” and its “brand reinvention,” how it “rebooted its customer experience and service standards,” and how its “newly designed site built in-house by a new technology team” and some other factors would make this restructuring work.
Today it said in a letter to employees that the liquidation is “a reflection on the state of the retail market today.”
Sears Canada was partially spun off in 2012 from similarly struggling Sears Holdings in the US, which still holds a 12% stake, and whose CEO Eddie Lampert — a hedge fund manager — owns a 45% stake in part via his hedge fund, ESL Investments.
In June, after it was granted court protection, the company received the court’s permission to try to find a buyer. Executive chairman Brandon Stranzl, backed by private equity firm Blackstone Group, tried to put together an offer, pledging to keep the company operating.



But Sears Canada said today that “following exhaustive efforts, no viable transaction for the Company to continue as a going concern was received.” This confirmed weeks of speculation that those efforts were doomed.
On October 4, Sears Canada asked the court for, and obtained, an extension of its creditor protection until November. 7. During the hearing, the lawyer for the retailer’s court-appointed monitor, FTI Consulting Canada, told the court that the company was assessing a revised bid by Stranzl, but was running out of time and money to decide. CBC News:
Quote :
A lawyer for the lenders argued that if a proposal to buy the business as a going concern does not materialize, it is key to liquidate before the Christmas season is over to maximize the value the process can attain.
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Hence the rush by the creditors to get the liquidation started.
Then there are the pension obligations for its 6,000 retirees and 12,000 beneficiaries. The plan has a deficit of C$266.8 million. A [url=http://cfcanada.fticonsulting.com/searscanada/docs/Motion Record re Windup of Sears Pension Plan-11Aug2017.pdf]motion[/url] was filed in August to wind up the plan. It would require the company to pay the full C$266.8 million to the plan, which the company doesn’t have. The motion adds:
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Quote :
The wind up also gives rise to a payment into the plan by the Ontario Pension Benefits Guarantee Fund (“PBGF”) that would help offset the underfunding in the plan and minimize pension benefit reductions.
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The motion has been postponed until at least November 30. And that’s how the once largest retailer in Canada becomes another entity in the brick-and-mortar retail meltdown, its remains getting picked through in bankruptcy court.
Liquidation too for Toys “R” Us? The company filed for bankruptcy in the US and Canada to restructure, but it can’t solve what’s killing it. Read…  The Fate of Toys “R” Us after Bankruptcy?[/size]
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