Sears Canada chairman steps down so he can bid to buy retailer
Company will also set up $500,000 fund to pay employees who were denied severance
The executive chairman of Sears Canada has stepped down in order to head up a bid to buy the company.
According to an employee memo obtained by CBC News, Brandon Stranzl will step away from his day-to-day operations at the company to instead focus on putting together a bid to buy the company and keep it going once it emerges from its current restructuring.
"In light of the approaching bid deadline and the focus required to assemble all necessary components of a bid, the board thought it was best for Brandon to focus exclusively on putting the bid together and step away from the day-to-day operations," said the memo, signed by Graham Savage, chair of the board of director's special committee while it restructures.
In June, Sears Canada announced it would be restructuring under the Companies' Creditors Arrangement Act and close almost 60 stores and lay off almost 3,000 employees in the process.
As part of those CCAA proceedings, there's an upcoming deadline of Aug. 31 for parties interested in buying any or all of the company's assets to step forward.
Stranzl had been focusing his efforts on finding a turnaround plan for the company after that process ends, and "the intention is to formulate these plans into a bid that can be submitted," the memo reads. "The goal of any such proposal is to facilitate a path for Sears Canada to emerge from CCAA and so that all of us can continue with the company's reinvention plans."
$500,000 fund set up for severance
Sears has faced backlash from customers, employees and pensioners over the handling of its abrupt decision to begin insolvency proceedings.
This week, the company agreed to create a so-called hardship fund for employees who were denied severance payments when they lost their jobs with the retailer.
The $500,000 fund will come out of money that had been set aside to pay bonuses under a key employee retention plan.
A lawyer who represents current and former employees says the creation has the support of both the company and a court-appointed monitor in its restructuring.
Susan Ursel says it's designed to "assist people in situations of precarious hardship."
The hardship fund requires approval by the court overseeing Sears restructuring at a hearing set for Friday.
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