The Company’s Comeback Motion proceeded on July 13, 2017 at the Ontario Superior Court of Justice (Commercial List) in Toronto, before Justice Hainey.
The Employee Representative Counsel Order has now been signed by Justice Hainey. It defines the terms of the mandate of Ursel Phillips Fellows Hopkinson LLP (UPFH) as Employee Representative Counsel and appoints the Employee Representative Committee. That Order is available here and will be available on the Monitor’s website. More information about the Order and the Committee is in our news item entitled, July 13, 2017 - Employee Representative Counsel Order is Issued by the Court on July 13, 2017.
At the outset of the Motion, Employee Representative Counsel addressed the Court to advise Justice Hainey that an Employee Representative Committee has been established. Counsel also advised that the Monitor has been assisting in discussions between Employee Representative Counsel and the Company regarding hardship experienced by employees caused by the loss of termination and severance pay, health and dental benefits, and life insurance. The discussions will also canvass possible mechanisms to alleviate these hardships.
Counsel for the Monitor referred the Court to the Monitor’s Report, available here, which sets out these discussions, including:
- the potential to establish an “Employee Hardship Fund”; and
- possible avenues to obtain early access to the Wage Earners Protection Program.
The Monitor advised the Court that they will continue to facilitate discussions between Employee Representative Counsel and the Company and will report to the Court on the outcome of these discussions.
On the balance of the issues set out in the Employee Representative Counsel materials, including issues regarding health and dental benefits, the Key Employee Retention Plan (“KERP”) and the Director’s Charges, the Court was advised that the parties would continue to engage in discussions on these issues. Employee Representative Counsel advised the Court that our right to make further arguments on these points was expressly reserved.
Employee Representative Counsel advised the Court that we have arrived at a settlement with the Company and other stakeholders for a mechanism to provide appropriate information about the Sale and Investor Solicitation Process (“SISP”) to Counsel and the Committee.
The means by which Employee Representative Counsel and the Employee Representative Committee will obtain information about the SISP is set out in the Term Sheet found at Appendix “A” of the Supplement to the First Report of the Monitor, available here. Information will be provided to Counsel and the Committee on a necessarily confidential basis and will help inform decisions about steps on behalf of the employees and former employees in these proceedings.
In exchange for the agreement reached regarding information and in light of the ongoing discussions, Employee Representative Counsel agreed not to oppose the orders sought by the Company on July 13, 2017 approving the Debtor In Possession (“DIP”) financing, the terms of the proposed amended and restated Initial Order, and the SISP.
Pension and post-retirement benefits matters were also dealt with at the Comeback Motion and information about these matters is available here, from the Representative Counsel for pension matters.
The balance of the day on the Comeback Motion was spent dealing with technical amendments to the Initial Order, Court approval of the DIP financing, and the terms of the SISP. The SISP Order will be available on the Monitor’s website shortly.
Please note, the Motion with respect to the Liquidation Process for the fifty-nine stores is now scheduled for Tuesday, July 18, 2017 at the Ontario Superior Court of Justice (Commercial List) in Toronto. Employee Representative Counsel will be attending. Details of the proposed Liquidation Process can be found in the Monitor’s First Report here.
Please check this site for regular updates on the CCAA proceeding.