Sears Canada Oppression
This case alleges that the payment of a $509 million extraordinary dividend by Sears Canada on December 6, 2013 was oppressive and contrary to the Canada Business Corporations Act (the “CBCA”). The claim seeks damages against Sears Canada Inc., its directors and its corporate parents, ESL Investments Inc. and Sears Holding Corporation for conduct contrary to the CBCA on behalf of operators of Sears Hometown Stores.
On June 22, 2017, Sears Canada filed for creditor protection under the Companies’ Creditors Arrangement Act (the “CCAA”), staying the action against Sears Canada and its directors. The stay against the directors has since been lifted by the CCAA judge. Sears Holding Corporation filed for Chapter 11 bankruptcy protection in the US, staying the action against Sears Holding Corporation. Accordingly, the claim against its directors and ESL Investments Inc. continues.
The claim is being advanced together with three other claims against the defendants brought by: (i) Sears’ Monitor in the CCAA; (ii) a Litigation Trustee appointed in the CCAA proceeding; and (iii) Sears’ pension plan administrator. Each of the claims relates to the payment of the extraordinary dividend in 2013 by Sears Canada.
The four actions are scheduled to be heard together at a joint trial scheduled for February 2020.
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- November 23, 2020: The Court approved the Distribution Plan for eligible class members. Class members entitled to an award will receive an equal share of the settlement funds. Click here to see Notice of Distribution Plan.
- September 18, 2020: The Court approved the settlement with ESL Investments Inc. (“ESL”). The class action has now been settled in full. The next step will be to develop a Distribution Plan for the class members. This will require Court approval and it is expected to be finalized in late-2020/early-2021. The settlement funds will be distributed shortly thereafter amongst the class members.
- September 9, 2020: Part I of the trial scheduled to begin today has been adjourned pending court approval of a settlement.
- August 12, 2020: There will be a hearing before the Court on August 25, 2020 at 1:00 p.m. by video conference to approve a partial settlement reached with the Director Defendants. Notice of the settlement hearing is here.
- April 1, 2020: The Court approved a partial settlement with the defendant, Sears Holdings Corporation on March 16, 2020. Please click here to read the Order.
- February 26, 2020: There will be a hearing before the Court on March 16, 2020 at 10:00 a.m. to approve a partial settlement reached with one of the defendants, Sears Holdings Corporation. Notice of the settlement is here.
- February 6, 2020: A Mediation was held February 4 and 5, 2020; the Mediation will resume on April 6 – 7, 2020. If not resolved the matter will proceed to trial in May 2020; the trial will be split into two parts with the Sears Hometown Dealers’ claim to be scheduled a few months later.
- June 21, 2019: The court certified the action as a class proceeding. A copy of the Order can be found here.
- January 25, 2019: The motion to certify the case as a class action will be heard April 17-18, 2019.
- January 25, 2019: If certified, the common issues trial will be heard in February, 2020, together with three other claims against the defendants brought by: (i) Sears’ Monitor; (ii) a Litigation Trustee appointed in the CCAA proceeding; and (iii) Sears’ pension plan administrator.
- December 3, 2018: The stay granted to the directors of Sears Canada has been lifted and the case can proceed against the directors.
- January 29, 2018: 1291079 Ontario Limited’s motion to have MNP appointed as financial advisor to the Class was adjourned. A copy of the Endorsement can be viewed here.
- January 25, 2018: Sotos LLP and Blaney McMurtry are appointed as representative counsel to represent the interests of the Class with respect to advancing a claim on behalf of the Class pursuant to the Claims Procedure Order dated December 8, 2017 in the CCAA filing. A copy of the Order can be viewed here.
- January 25, 2018: See Notice to Class here.
- January 19, 2018: We are seeking a representative order in the CCAA to represent the Hometown Dealers. We are also seeking to have MNP LLP appointed as financial advisors to the class. This motion will be heard January 29, 2018. Our intent is to file a Proof of Claim on behalf of the class setting out the class’ damages.
- June 22, 2017: Sears has filed for creditor protection under the Companies’ Creditors Arrangement Act (the “CCAA”). This filing stays (puts on hold) the class action. We are currently reviewing and assessing the class’ rights in the CCAA filing.
- October 21, 2015: A statement of claim was issued alleging that Sears oppressed the class members when it paid out a $500 million dollar dividend to its shareholders in December 2013. A copy of the statement of claim can be viewed here.
