13D Filing: Fairholme (FAIRX) and Sears Canada Inc. (SRSCQ)

No material changes from the Schedule 13D filed by the Reporting Persons on November 30, 2016.

No material changes from the Schedule 13D filed by the Reporting Persons on November 30, 2016.

The Reporting Persons have acquired their Shares of the Issuer for investment. The Reporting Persons evaluate their investment in the Shares on a continual basis.

The Reporting Persons have no plans or proposals as of the date of this filing which, relate to, or would result in, any of the actions enumerated in Item 4 of the instructions to Schedule 13D, except as set forth below.

The Reporting Persons reserve the right to be in contact with members of the Issuer’s management, the members of the Issuer’s Board of Directors, other significant shareholders and others regarding alternatives that the Issuer could employ to increase shareholder value.  The contact may include proposing or considering any of the actions enumerated in Item 4 of the instructions to Schedule 13D.

On June 22, 2017, the Issuer announced that it and certain of its subsidiaries applied to the Ontario Superior Court of Justice (Commercial List) (the “Court”) for protection under the Canadian Companies’ Creditors Arrangement Act (the “CCAA”), in order to continue to restructure its business. The Issuer subsequently announced on June 22, 2017 that the Court granted an order under the CCAA for a stay of proceedings in favor of the Issuer and certain of its subsidiaries for an initial period of 30-days, subject to extension as the Court deems appropriate, and the appointment of FTI Consulting Canada Inc. as Monitor (the “Monitor”) in the CCAA proceedings.

On July 27, 2017, Fairholme and ESL Partners L.P., RBS Partners, L.P., ESL Investments, Inc. and Edward S. Lampert  terminated their Joint Representation of Canadian legal counsel with respect to a potential negotiated transaction with the Issuer and its subsidiaries in connection with the Issuer’s CCAA proceedings.  Fairholme continues to evaluate the Issuer and its business, affairs, operations, results of operations, contracts, liabilities, properties and prospects, and may consider, evaluate and discuss potential transactions involving the Issuer or its affiliates, including, without limitation, financing transactions, purchase and sale transactions or restructuring transactions. Fairholme, either individually or together with other parties, may make proposals with respect to such transactions involving the Issuer or that may otherwise involve one or more of the types of transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D.  Fairholme also is evaluating and considering a potential sale of Shares of the Issuer in order to generate a tax loss for Fairholme and its investors.  There is no assurance that Fairholme will make or pursue any such proposal or transaction or that any such proposal will result in a completed transaction.

The Reporting Persons reserve the right to effect transactions that would change the number of shares they may be deemed to beneficially own.