A lawyer representing employees of defunct retailer Sears Canada is calling for the disbandment of the company’s Board of Directors who remain on the job and have earned more than $600,000 in pay this year.
The law firm representing Sears Canada’s former employees will argue for the board's removal before the Ontario Supreme Court on August 27 – contending that the money being spent on four directors could go to provide severance pay to employees who were laid off when Sears Canada closed its final stores in January.
So far this year, the four remaining Sears Canada directors have incurred more than $600,000 in professional fees and earned more than $600,000 in pay, according to court documents.
The employees' lawyer is arguing that the court-appointed monitor handling the retailer's insolvency can wind up its few final matters. It also suggests money going to the board could instead go to people still owed money by Sears, such as laid-off workers who were not given severance pay.
The court filing shows that the board members are prepared to reduce their monthly pay to $5,000 each. But the lawyer representing employees, Erin Epp of the Toronto law firm Ursel Phillips Fellows Hopkinson LLP, argues that the pay cut isn't good enough because it doesn't address the added legal and financial adviser fees incurred by the board — at least $1.74 million since Sears became insolvent in June 2017 — that could benefit former workers.
About 17,000 Sears Canada employees lost their jobs due to the retailer's demise. Many have filed claims in court and expect to receive between zero and 10% of what they're owed in severance pay.
In a response filed in court, the Sears Canada directors say that since the company filed for bankruptcy protection, they have been "heavily involved" in the process "all with a view to maximizing value and acting in the best interest of the company."
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