“A court-appointed representative for Sears Canada retirees said Tuesday that Canada's bankruptcy laws should be changed to avoid future financial hardship for members of other underfunded pension plans.”
That’s the first sentence of a Canadian Press story that makes me so angry I want to punch a hole in the wall.
It’s because Sears retirees – including many who worked for the Burnaby stores that once graced Brentwood and Metropolis at Metrotown malls – had their retirements upended when the company imploded.
“In the Sears Canada bankruptcy process, which hasn't yet been completed, there wasn't enough money to fund pension shortfalls after debts to banks and active employees were repaid ahead of other classes of creditors,” reads the story.
Yep, banks got paid first.
And so Kenneth Eady, a former Sears Canada management employee who now represents 17,000 other pensioners, spent Tuesday telling MPs that he doesn't believe it's fair that Canada's two bankruptcy laws give banks more protection than pensioners.
Parliament should pass a Bloc Québécois bill to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, Eady told a Commons committee that's reviewing the proposed legislation.
"You're the ones who can make a difference here, folks," Eady said. "The MPs on this committee can vote in favour of this bill, and help protect seniors. I suggest you do."
Under questioning, Eady said that Sears Canada retirees would have been helped if the proposed amendments to the two laws were in place when Sears Canada filed its initial request for court protection in June 2017.
Sears Canada retirees would have been helped much more if they were ranked ahead of other creditors but behind banks, who have "super priority" status, Eady said.
"It's a different type of debt that you have with the pension plan,” Eady said. “It's a long-term outstanding debt. And so, they have to be treated as super creditors to be to make it meaningful to pensioners."
I mean, imagine you worked decades for Sears believing that at the end of it, you could expect a stable pensions only to see other creditors given preference.
Eady said in an interview Tuesday after his presentation that the high profile nature of the Sears Canada bankruptcy serves as an example of what's wrong with the current laws, he said.
"MPs are people with family who shopped at Sears. Maybe they worked there as a kid. I know several that have," he said. "Hopefully the fact that Sears is familiar to so many people, helps ... bring this issue clarity."
Let’s hope so, but politicians have a history of doing the wrong thing when it comes to banks.
- With additional reporting by the Canadian Press
