Sears Canada Inc. and certain of its subsidiaries have been granted an order from the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (CCAA).

Among other things, the Initial Order provides for a stay of proceedings in favor of the Sears Canada Group for an initial period of 30-days, subject to extension thereafter as the Court deems appropriate, and the appointment of FTI Consulting Canada Inc. as Monitor in the CCAA proceedings. The Initial Order also authorizes the Sears Canada Group to obtain debtor-in-possession financing in the aggregate principal amount of C$450 million, with the company's existing ABL lenders, with Wells Fargo Capital Finance Corporation acting as administrative agent, and the company's existing term loan lenders, with GACP Finance Co., LLC acting as administrative agent.

The DIP Financing is expected to provide the Sears Canada Group with sufficient liquidity to maintain business operations throughout the CCAA proceedings. The Sears Canada Group will work to complete its restructuring in a timely fashion and hopes to exit CCAA protection as soon as possible in 2017, better positioned to capitalize on the opportunities that exist in the Canadian retail marketplace.

The company also announced the closing of 20 full-line locations, plus 15 "Sears Home" Stores, 10 "Sears Outlet" and 14 "Sears Hometown" locations as well as a corresponding planned reduction in its workforce of approximately 2,900 positions across its retail network and at its corporate head office in Toronto. A list of the stores that the Company anticipates closing is included with this announcement. The specific timing of the store closings has not yet been finalized. All other Sears Canada stores and the Sears e-commerce website, www.sears.ca, continue to be open for business.

The Initial Order does not apply to Sears Canada pension plan assets (i.e., the amounts that have previously been contributed into the pension plan), which assets are held separate from the assets of the Sears Canada Group. Accordingly, monthly pension payments to beneficiaries from that pension plan are not affected by the Initial Order and will continue in accordance with the terms of the plan.

In order to assist the company with this process, it has retained BMO Capital Markets, as financial advisor, and Osler, Hoskin & Harcourt LLP, as legal advisor. The Board of Directors and the Special Committee of the Board of Directors of the Company has retained Bennett Jones LLP, as legal advisor.