Bankruptcy Court Judge to Give 29,000 Sears Retirees Chance to Claim Life Insurance

U.S. Bankruptcy Court Judge Robert Drain is giving Sears Holdings’ 29,000 retired employees a chance to claim their life insurance benefits after the company filed bankruptcy in 2018.

Sears officially ended its life insurance benefits last March 2019, breaking its promise of ‘generous’ benefits to employees. This happened after the company sold most of its remaining assets to Transform Holdco, an entity controlled by Sear’s former CEO Edward Lampert.

According to Chicago Tribune, Sears owes the 29,000 employees with $5,000 to $14,500 worth of benefits, which totals to $1.3 million monthly premiums.

Meanwhile, the attorney representing the company said in a statement that given the circumstance of the company, “it can no longer pay for the significant premiums for the policies.”

Physical Stores are in Trouble

CBN Insights reports that about 68 retail brands are collapsing and reported bankruptcy since 2015. These brands are troubled because of the expansion of Amazon and other online brands.

Earlier this year, Payless filed its second bankruptcy, announcing the closure of more than 2,100 stores in the United States. The footwear retailer is expected to be out in the business in 2021.

What Sears Holdings is experiencing is the same with these brands because of customer behaviour change. Other factors include broader shopping options for customers, which makes it harder for retail stores to compete.

Meanwhile, Sears is still in hot waters as the court is siding the thousands of retired employees. When the company objected to the request of retirees to get life insurance premiums, the committee representing Sears said the funds are ‘limited.’

The settlement is yet to be finalized with Sears’ attorneys still not giving any final say. It is expected that the company will reach out to employees to end the cases filed against them.