Dozens of current and former Sears Holdings Corp. employees sent a letter to Chairman Edward Lampert and other creditors on Thursday, asking them to pay severance and save as many jobs as possible as the retailer goes through bankruptcy, The Wall Street Journal reported. "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," the letter stated, according to the Journal. In response to the letter, a Sears Holdings spokesperson 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."
Sears filed for bankruptcy protection in October after years of staying afloat through financial maneuvering and relying on billions of CEO Eddie Lampert's own money. Lampert, who had served as CEO for the past five years, stepped down from the post, but remains company chairman. As part of the bankruptcy, Sears will shutter 142 stores by the end of the year. However, it's still working to keep several hundred outlets open as part of Lampert’s plan to buy the company out of bankruptcy.
Total Retail's Take: The letter and campaign was inspired by laid-off Toys“R”Us workers who persuaded its former employer to establish a $20 million hardship fund. As a refresher, private equity firms Bain and KKR announced last week that they would contribute $20 million to a compensation fund for former employees of Toys“R”Us. The toy retailer filed for Chapter 11 bankruptcy in September 2017, laying off tens of thousands of workers without severance packages. And for months, those former employees have been putting pressure on the company’s private equity owners to pay up. The workers say the $20 million is a start. But they're asking for more — $75 million in total, based on the retailer's severance policies. They're hoping to get the rest from Toys“R”Us creditors and its other private equity owner, Vornado Realty Trust.
Sears’ current and former employees are particularly disgruntled, as it has been reported that Sears is seeking court approval to pay executives as much as $25 million in annual bonuses while the company struggles to restructure in bankruptcy. Three top executives could get nearly $1 million each if the company goes out of business. If Sears remains in business, they could get nearly $500,000 each for hitting performance targets.