Sears Canada creditor process biased toward sale, says former exec

TORONTO _ Sears Canada’s former executive chairman says his plan to turn around the embattled retailer was well-reasoned but the creditor protection process was biased towards liquidation.

Brandon Stranzl says the creditor process which Sears entered in June was structured as a sale rather than a rehabilitation from the beginning.

“Everybody wanted there to be a going-concern solution that saved the jobs, but there were many obstacles and many rules that seemed to be in place to get in the way,” he told reporters at a press conference on Monday.

Stranzl had been in weeks-long discussions with the embattled retailer to buy it and continue to operate it, but no deal was reached. Sears Canada began liquidation sales at its roughly 130 remaining stores across the country on Oct. 19. The retailer got the green light from an Ontario court to proceed with its full liquidation earlier this month, putting another 12,000 employees out of work.

Stranzl said Monday the process under the Companies’ Creditors Arrangement Act was structured in this “unusual” way in part because the retailer had large operating losses, but pitting a going-concern solution against liquidation from the outset skewed the discussion.

He added that after he stepped away from his role to focus on submitting a bid there was no leadership in the room to guide the process towards a solution that would allow Sears to keep its doors open.

Stranzl, who resigned from Sears Canada’s board of directors on Oct. 16, says he is saddened for the thousands of employees who have or will lose their jobs.

“It has left a very large hole and wound in my own heart, and I feel very deeply for these people,” he said. “And I spent a lot of time on this business, and really put my own heart and soul into it, and so to have this be the end has been very difficult.