Shopko employees request severance pay after approval of a bankruptcy plan

GREEN BAY – Nearly 700 current and former Shopko employees signed a letter demanding severance pay, now that the retailer's plan to phase down sales has been approved by a federal bankruptcy judge.

The plan was approved Friday by US judge Thomas Saladino after the Ashwaubenon-based retailer and McKesson Corp., a San Francisco-based pharmaceutical company, reached an agreement preserving McKesson's ability to sue senior executives, directors and executives. external consultants of Shopko.

McKesson is seeking $ 55 million in proceeds for drugs and other products supplied to Shopko.

The issue prevented Saladino from approving the plan at a hearing in May. The signing of this plan by Saldino paves the way for the end of the liquidation sales of the stores and the closing of the remaining stores on June 23rd.

RELATED: Shopko: Judge Rejects Retailer's Bankruptcy Plan

In the meantime, about 700 current and former employees are seeking severance pay from Sun Capital Partners, the private equity firm that bought Shopko for $ 1 billion in 2005.

They claim that the employees would have been promised severance pay in the weeks following the filing of Shopko's application for bankruptcy protection in January, but that the payments were withdrawn from the budget during the bankruptcy proceedings.

"We promised many of us a severance pay when we learned that our stores were closing, then, after staying until the end and going through the grueling liquidation process, we learned that we would not be compensated, "says the letter. .

"For stores that have not yet closed during the final phase of the liquidation, front-line employees have been asked to stay, knowing that they would not receive any severance pay or benefits. retention."

Kristi Van Beckum, who worked for nearly 14 years as Shopko's Assistant Director in Madison, said employees were receiving packages while store closures were being advertised, offering retention or severance pay in order to save money. keep them until the store closes.

She stated that the employees at the store where she worked had not learned that there would be no severance pay before the store closed in April.

Van Beckum, who has since found another job, described the move as "morally reprehensible".

"It hurts after all the years I've spent on Shopko not letting them keep their word," she said. "A lot of people stayed around, they thought they were entitled to severance pay, and it's a family-owned business, it's based in Wisconsin, and we wanted to keep it going."

Employees, supported by the Workers' Defense Group United for Respect, ask Sun Capital to create a support fund for the approximately 14,000 employees who lost their jobs due to bankruptcy.

United for Respect was formed a decade ago to help Walmart employees get better pay and benefits. Since then, the organization has helped employees earn severance benefits from Toys R Us and Sears after the closing of these businesses.

In the case of Toys R Us, former employees have successfully pressured KKR and Bain Capital, two of the majority owners of Toys R Us, to create a $ 20 million financial assistance fund for them.

Lily Wang, deputy director of United for Respect, said that Shopko employees were angry and frustrated to watch business owners go without responsibility.

"We found that with Toys R Us, Sears and Kmart and now Shopko, employees (…) are always the last to get anything at a time when they lose their livelihood," he said. Wang said. "The rules are rigged against the workers."

Van Beckum said that she would like to see new laws that would protect employees against dismissal.

"In the retail business, many people live paychecks," she said. "Two weeks of pay might not seem like a lot, but for a teammate it could mean paying the rent on time or having your car repaired."

On January 16, Shopko declared bankruptcy in Nebraska, citing assets of less than $ 1 billion and a debt of $ 1 billion to $ 10 billion. The company discussed the pressures on the retail market, the industry's shift to online sales and other factors behind its decline.

Contact Jeff Bollier at (920) 431-8387 or [email protected]. Follow him on Twitter at @GBstreetwise.

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