Sears Canada has been in serious financial trouble since 2013, when workers wrote to the CEO and regulators and senior politicians to ask that their pensions be safeguarded. They were ignored, as they had been since 2009, when they first started asking for greater scrutiny of the pension fund.
While these warnings were being sounded, Sears began liquidating its assets and sending the proceeds from these sales — which vastly exceeded the hole in the pension fund — to private-equity shareholders who'd taken over the business, without a peep from regulators.
Throughout this time, employees were required to continue to pay into the plan out of their paychecks, even though it was obvious that the plan would not survive the looming bankruptcy.
Between Dec. 9, 2005 and Dec. 9, 2013, Sears Canada paid $3.4 billion in dividends to shareholders, including $2 billion in 2005, $377 million in 2010, $102 million in 2012 and $509 million in 2013.
The dividends were being funded by the sale of some of the company's most important assets, including the Sears Credit and Financial Services operations, which was profitable and contributed a large portion of Sears Canada's total earnings. It was sold for $2.4 billion in 2005. Sears sold leases to flagship stores in Toronto, Calgary and Vancouver.
Will 16,000 Sears Canada retirees see their pensions? [Francine Kopun/The Star]