As Sears Holdings Corp. works through its bankruptcy, both current and former workers are expressing concerns over their futures ahead of the holiday season.
In a letter published in The Wall Street Journal, dozens of employees at the beleaguered department store chain drafted a letter addressed to chairman Eddie Lampert and other creditors, urging the company to deliver severance packages, keep stores operational and salvage as many jobs possible as it continues Chapter 11 proceedings.
“While we understand Sears and Kmart must make changes to survive, we do not believe it is fair that financial firms stand to profit from Sears’ bankruptcy while employees like us are asked to sacrifice,” read the letter.
In response, a company spokesperson reportedly said, “Protecting the interests of Sears’ associates and all stakeholders has and will continue to be a priority for the management, board and restructuring committee of Sears.”
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The ailing retailer drew ire in mid-November after filing a motion in bankruptcy court that sought approval to fork over up to $25 million in executive bonuses. It would reach a limit of nearly $250,000 on a quarterly basis for a number of top officials with base salaries of an estimated $1 million each year. Additionally, a group of 322 unnamed workers would be eligible for “cash retention awards” of around 30 to 40 percent of their annual earnings for staying with the company, disbursed from a pool of $16.9 million.
Sears’ lawyers argued that senior management and other employees who would stand to benefit “are critical to [the company’s] ability to maximize stakeholder value through this restructuring process.” The hearing is set for Dec. 20, as the company is also considering offers from liquidators that would shut down its business and lead to even more layoffs.
The severance request comes shortly after two of Toys R Us’ private-equity owners, Bain Capital and KKR, agreed to establish a $20 million hardship fund to pay former employees. When the company abruptly closed its remaining stores in the summer, members of Congress as well as the public rallied in support of the toymaker’s 31,000 workers. Several C-suite leaders left with millions in bonuses.
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