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Aug 04, 2017

Sears closures set according to commercial bankruptcy law

Large businesses filing for bankruptcy can find the bankruptcy process tricky to navigate, especially when many storefront locations and groups of employees are involved. The response to Sears' recent bankruptcy filing from stores across Ontario has highlighted these complexities. Understanding the legal implications and necessary steps of commercial bankruptcy is important for every person working for a company which has recently undergone this process.

A court ruling has defined certain parameters regarding the Sears' bankruptcy. Among them is a closure date of Oct. 12. The 54 stores across the country, including many in Ontario, have until then to sell off inventory. The ruling came following an agreement the company had made with stakeholders and lawyers regarding a claim, in which Sears agreed to continue paying out pension and post-retirement benefits up until September 30.

This high-profile commercial bankruptcy has raised many questions among residents and politicians regarding a company's responsibilities to its employees during these kinds of proceedings. Under the current law, creditors often take precedence over employees' lost wages. Some lawmakers are looking at legislative changes to create a fairer system for employers and employees alike.

Commercial bankruptcy not only affects one business, but also the organization's employees and all companies associated with the business. Balancing responsibilities to employees, creditors and shareholders can be challenging for anyone navigating this process. Changes to the law, such as those being discussed in Ontario, can affect how the bankruptcy process will be managed. As a result, consulting with a lawyer who focuses on these issues is an important consideration when facing bankruptcy proceedings.

Source: hamiltonnews.com, "Ancaster Sears' sell-off begins amid calls to fix 'unfair' bankruptcy law", Richard Leitner, July 27, 2017

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