A $500,000 austerity fund created for former Sears Canada employees is facing a accomplishable $200,000 shortfall, according to court documents.
The problem appears to be with a Sears governmental who pledged to donate the $200,000 from a retention bonus, but may now be hesitating to cough up the realize.
“There is uncertainty regarding the agreement of the [bonus payment] beneficiary who some time ago proposed to contribute such funds to now proceed to contribute those wherewithals,” the court-appointed monitor for Sears Canada says in the latest report to Ontario Preferred Court.
The hesitant beneficiary appears to be Sears executive chairman Brandon Stranzl. He’s superior up a bid to buy the retailer, but talks are not looking promising.
Ursel Phillips, the law firm noting current and former Sears employees, fought for the hardship fund for insolvent laid-off workers. The firm’s lawyer, Susan Ursel, said that as far as she recognizes, Stranzl had intended to donate the fund’s entire amount of $500,000.
She says it’s her reason he has already donated $300,000 from his retention bonus, but has not yet offered up a back lump sum of $200,000 from his second bonus payment, which he experienced in late September.
During Sears bankruptcy hearings Wednesday, Ursel inquired that executives stop receiving retention bonus payments until the worry is resolved.
“The judge said, ‘That’s reasonable, they agreed to a bad luck fund, they shouldn’t be using this money for other thingumajigs,'” she said.
‘It was a joke’
Sears Canada agreed to the hardship pay for, which got court approval in August and was supposed to supply up to $500,000 for financially strapped hands.
None of the current 3,100 laid-off workers are receiving severance or go oned benefits.
All the funding was set to come from the $7.6 million in retention compensations that the retailer pledged to pay 43 executives and senior managers in instalments during Sears’ restructuring.
CBC Good copy asked Sears Canada about the hardship fund’s status, but a spokesperson predicted he couldn’t offer any details because the retailer didn’t announce the program or authorize which executives were donating a portion of their bonus payments.
The prospect of a $200,000 shortfall for the fund is not sitting well with financially strapped hands who have lost their Sears jobs.
“I’m disgusted with that,” chances Zobeida Maharaj. The laid-off senior operations store manager exhausted 28 years working for Sears in the Toronto area.
She plans to appeal for the hardship fund because her husband will also soon be belabour exaggerated off from his job in the auto industry. Maharaj says that when the program was set, she felt half a million wasn’t enough.
“I really thought it was a frolic, that little amount. Out of the big bonuses they were given, all they could put aside was $500,000.”
For her, the possible that fund may now drop to $300,000 is distressing.
“I’m just in awe. I didn’t ponder they would sink any lower, but they did,” says Maharaj, who has already mystified a year’s salary in severance payments. “Do they have any kind of tender heart? You’re affecting people’s lives.”
CBC News spoke to a source who manifests to be in Stranzl’s camp and is close to the Sears bankruptcy hearings. He said Stranzl was the merely executive who coughed up cash for the hardship fund, and that now Sears can take its employees by approving Stranzl’s bid.
“The best way to help them now is for Sears Canada to a standstill delaying, stop selling off the company in pieces, and to accept the only bid they’ve come by — and the only bid that will keep Sears Canada alive, and guard thousands of jobs,” he said in an email.
The monitor’s write up says that the hardship fund has received 22 applications, 15 of which possess been approved. So far, $35,000 has been paid out or committed to recipients.
The divulge also notes that fund recipients also receiving vocation insurance are losing out. That’s because the recipients must report the appurtenance funding as earned income, which then reduces or eliminates their EI payments.
The hands’ law firm is speaking with Service Canada regarding this question, says the report.
Sears Canada is closing 58 stores and get attack off 3,100 workers as it struggles for survival in a court-supervised restructuring process.
On Wednesday, the cash-strapped retailer on seek court approval to shut down 11 more co-op give credence ti, which would result in 1,200 more layoffs.
Sears disposition also ask for permission to extend the court’s protection from creditors until Nov. 7 while it continues settlements with Stranzl and his bid for the retailer.