Sears Canada to compromise on cuts to benefits, special pension payments

A court-appointed monitor says Sears Canada, its lenders and lawyers for employees have reached a compromise that could allow the company to continue paying certain health benefits and special pension payments up to the end of September.

A monitor's report filed this morning was prepared for a hearing at the Ontario Superior Court, which granted Sears Canada temporary protection from creditors three weeks ago.

Sears Canada had initially asked permission to immediately halt payments for health and dental benefits for former employees, retirees and surviving spouses as well as the company's special payments to the Sears Canada pension plan.

However, lawyers representing Sears Canada employees asked the court to reinstate or continue the health benefits until October as the company restructures under court protection from creditors.

In separate documents filed by the company's lawyers, Sears Canada's chief financial officer says that it's "crucial" to begin liquidation sales of inventory no later than July 21 and to be completed by Oct. 12.

In an email to our newsroom, Sears Canada spokesperson Vincent Power says there's been no determination yet about when individual stores will close.

(With files from The Canadian Press)