Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Friday October 27, 2017
Sears Canada pensioners demand shortfall be paid off first
The law firm representing Sears Canada pensioners has issued a letter to the agency overseeing the liquidation and all other creditors, asking that the pension deficit be paid first and as soon as possible, as money from liquidation sales becomes available.
“Our clients . . . are entitled to first priority recover for those amounts,” according to the letter, from Koskie Minsky’s Andrew Hatnay, citing a prior Supreme Court of Canada decision.
The letter is addressed to the monitor assigned to the case, FTI Consulting, and to the service list, which includes lawyers representing every party to the insolvency.
If Hatnay’s position is accepted by the creditors lining up to be paid, the pension’s $270-million deficit would be paid first, although pensioners would not receive other benefits – dental benefits and life insurance benefits, which were discontinued at the end of September.
If the other creditors refuse to allow the pensioners to be paid first, the matter could end up before the court, according to Hatnay.
The legal letter was sent Thursday, a day after Innovation Minister Navdeep Bains said the federal government will consider legislation to protect employees’ pensions when a company goes bankrupt.
While there’s no plan for the government to introduce legislation at the moment, he said it will carefully examine two different private member’s bills on the subject, put forward by a New Democrat MP and a Bloc Quebecois MP. (Source: Toronto Star)