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The suit notes that in the third quarter of 2013 reported on Nov. 19 of that year, Sears Canada posted a net loss of $48.8 million. “Nevertheless on that same day, despite these losses, the directors declared an extraordinary cash dividend of $5 per share” to shareholders of all common shares, a payout of $509 million. “The primary beneficiaries of the extraordinary dividend were Holdings and ESL,” the claim says.

“Sears (Canada) was slashing its operating budget which would deprive it of the ability to effect a turnaround of its operations, and would continue to do so in the future.”

Sears Canada’s board of directors approved the half-billion payout despite knowing the hometown dealers had filed a $100-million class action earlier in 2013, alleging Sears Canada and its owners hurt their businesses by changing its commission structures and diverting sales away from dealers and towards its own website, Sears.ca.

Counsel for the plaintiff in that class action, certified by an Ontario Superior Court judge a year ago, had informed Sears Canada’s counsel days before the dividend was issued in 2013 that its board of directors would be jointly and individually liable if Sears Canada were unable to satisfy a potential future judgment against the retailer in the class action.

The new claim says the extraordinary dividend put pressure on the retailer that it could not afford, the suit alleges, and in doing so was “oppressive and unfairly prejudicial to and unfairly disregarded the interests” of the class action, which violates a section of the Canada Business Corporations Act.