Canada’s oldest retailer, Hudson’s Bay Co., closed all of its stores across the country earlier this month.Graham Hughes/The Canadian Press
Former Hudson’s Bay Co. employees who face the loss of long-term disability benefits will have that support extended until July 15, while lawyers continue discussions about further possible financial relief.
Law firm Ursel Phillips Fellows Hopkinson LLP, which was recently appointed by the court as representative counsel for the HBC employees, announced the one-month extension on Tuesday, less than one week before some employees were due to lose their benefits.
Canada’s oldest retailer closed all of its stores across the country earlier this month, and is in the process of winding up the business permanently, a process that has already led to the loss of more than 8,300 jobs, with hundreds more layoffs to come.
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In addition to the job losses, roughly 189 people will lose their disability benefits, because that group was covered under an “administrative services only” (ASO) arrangement that paid benefits out of the company’s own cash.
The Globe and Mail reported on the existence of the ASO plan in April, as employees feared the benefits they rely on would disappear. There are also 100 to 200 employees who receive disability benefits under a separate, insured plan. Those benefits are unaffected by the retailer’s insolvency, and will continue to be paid.
People covered by the ASO plan will receive a payment equal to one month of benefits, for the period ending July 15, Ursel Philips announced on Tuesday.
“The purpose of this extension is to permit the relevant parties to continue discussions regarding possible further hardship relief,” according to a post on the law firm’s website.
For Hudson’s Bay employees that receive benefits under the ASO plan, any continuing support beyond that date will depend on an agreement with the company’s senior lenders.
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Other former employees have also lost support, including roughly 2,200 retirees whose health and dental benefits were cut off on April 30, along with their life insurance policies.
The company and its senior lenders, along with the lawyers for the employees, “continue to explore the possibility of implementing a hardship fund or structure to provide monetary assistance to current and former employees who are experiencing financial difficulty after the loss of their benefits,” Hudson’s Bay chief operating officer and chief financial officer Michael Culhane wrote in an affidavit filed with the court last month.