TORONTO — Sears Canada pensioners will ask an Ontario court this week to appoint a retired judge to review dividend payments, including many to CEO Eddie Lampert and his hedge fund, made by the company prior to its insolvency, The Globe & Mail reports. The group wants to see Frank Newbould, who is retired from the Ontario Superior Court, named litigation trustee. In that capacity, he would co-ordinate a variety of investigations into the Sears’s actions, including the payment of dividends the pensioners say contributed to the retailer’s downfall.
“In the years prior to applying for protection in June 2017,” according to a statement by group’s head, William Turner, “Sears Canada sold off significant assets, declared substantial dividends paid to shareholders—in particular ESL and Mr. Lampert—and drastically reduced its investment and commitment to the retail business of the company.” Lampert’s ESL Investments was the controlling shareholder for Sears Canada.
Sears Canada spokesman Chris Brathwaite countered in an email statement that the dividends were “authorized by Sears Canada’s board of directors during a time when Sears Canada was clearly solvent” and that the board acted in accordance with its duties.