Sears to pay $154.25 million to Canadian dividend lawsuit plaintiffs

By Caroline Salls

Pittsburgh, March 30 – Sears Holdings Corp. requested court approval of a dividend claim class action lawsuit settlement reached with Canadian plaintiffs as part of Sears Canada Inc.’s Companies’ Creditors Arrangement Act proceedings, according to a motion filed with the U.S. Bankruptcy Court for the Southern District of New York.

The motion said the Canadian plaintiffs have been litigating claims in the Ontario Superior Court of Justice, including lawsuits related to dividends declared and paid by Sears Canada in 2013 and efforts by the Canadian plaintiffs to recover these dividends.

Specifically, Sears said four proofs of claim filed by the Canadian plaintiffs ranged from $61.7 million to $392.6 million.

Under the proposed settlement, the Canadian Plaintiffs, collectively, will be granted a single $154.25 million unsecured claim against Sears Holdings.

In addition, Sears will continue to be obligated to comply with its discovery obligations to the Canadian plaintiffs in connection with the dividend litigation.

The settlement may be terminated if not approved by the bankruptcy court by May 12.

The Ontario court approved the settlement on March 17, the motion said.

A hearing is scheduled for April 23.

Sears is a retailer based in Hoffman Estates, Ill. The company filed bankruptcy on Oct. 15, 2018 under Chapter 11 case number 18-23538.

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