Sears employees push for severance pay
- In a letter addressed to Sears Holdings Chairman Eddie Lampert on Thursday, dozens of current and former Sears employees urged Lampert and other creditors to pay severance and save as many jobs as possible as it undergoes Ch. 11, The Wall Street Journal reports.
- "While we understand Sears and Kmart must make changes to survive, we do not believe it is fair that financial firms stand to profit from Sears' bankruptcy while employees like us are asked to sacrifice," the letter stated, according to the Journal. In response to the letter, a Sears Holdings spokesperson said: "Protecting the interests of Sears' associates and all stakeholders has and will continue to be a priority for the management, board and restructuring committee of Sears."
- Also last week, Sears Holdings asked a New York bankruptcy court for permission to sell 13 Kmart and Sears locations for $62 million to a real estate buyer for U-Haul International, according to Law360.
Over the last several months, Sears has announced it will close at least 182 stores through bankruptcy, though it has also identified about 500 stores it hopes to sell to a new owner to continue to operate the business. Then again, if a takeover deal ultimately falls through, liquidation is still a possibility for the iconic retailer.
From the get-go, Sears has said it plans to sell a pared-down version of its business. But last week anonymous sources told the Journal that the retailer has contacted "a number" of liquidation firms. Its former CEO, however, is one of its first prospective buyers, although he faces several big hurdles, including a challenge from Sears' unsecured creditors.
Sears employees are pushing for a severance fund similar to the $20 million fund set up by Toys R Us' former owners Bain Capital and KKR & Co. It remains to be seen whether the Toys R Us fund will set a new precedent for retailers working through bankruptcy filings. Those workers, many of which have taken to activism over the last several months, have said they're owed $75 million from the company and its lenders, according to worker advocacy group Rise Up Retail. While it's been over a year since the toy retailer filed for bankruptcy, workers have yet to receive any such funds. Depending on how Sears' bankruptcy pans out, employees may have a similar uphill battle ahead of them.
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