By Solarina Ho
TORONTO — Sears Canada Inc majority shareholders including Edward Lampert, ESL Investments Inc and Fairholme Capital Management LLC are seeking access to internal documents related to its restructuring, according to a notice of motion posted on Wednesday.
The court motion, which will be made on Thursday in the Ontario Superior Court of Justice, comes as the court-appointed monitor FTI Consulting said more than 20 parties have signed non-disclosure agreements with Sears Canada.
The retailer was still negotiating non-disclosure agreements with ESL and Fairholme.
Sears Canada, which in 2012 was spun off from U.S. retailer Sears Holdings Corp, filed for creditor protection last month and laid out a restructuring plan that included cutting 2,900 jobs and closing roughly a quarter of its stores.
Earlier this week, Lampert’s ESL Partners LP and Fairholme, which own about two-thirds of Sears Canada, said they were considering a potential deal with the retailer and had engaged a legal adviser.
According to the notice, ESL, Fairholme and Lampert, the chief executive of Sears Holdings, are asking the court to grant access to Sears Canada’s employee retention plan, details on expected store closing costs relative to the savings expected and a financial retainer agreement with Bank of Montreal among other documents.
Lou Brzezinski, an attorney at Blaney McMurtry LLP who is representing several Sears Canada landlords and suppliers, said the motion was a sign of the group’s seriousness.
The motion also sought to make clear that certain “conflicted” members of Sears Canada management who intend to submit a bid or proposal are excluded from any involvement in the process, including any decisions around the selection of a successful bid.
Brzezinski is also filing a motion on behalf of a client to be included as an observer.
Separately, Oxford Properties Group and OPGI Management Limited Partnership, also filed court documents to express “serious concerns” about the process, which they said could potentially undermine contractual and property rights. Sears Canada owns property that is part of Oxford’s Upper Canada Mall.
©Thomson Reuters 2017