'It's finally happening': After almost 2-year fight, Shopko employee severance checks go out this month; key deadline Feb. 2

GREEN BAY - Severance checks for about 4,000 former Shopko workers should be in the mail this month, almost two years after employees helped close the bankrupt retailer's stores. 

Kristi Van Beckum, who worked at Madison area Shopko locations for almost 14 years, said she's more relieved than anything to know front-line employees will finally get what the company promised as an incentive for employees to stick with the company through the liquidation effort. 

"It's pretty crazy. It’s finally happening," Van Beckum said. "It was money promised to us. It’s the ethical thing to do, especially more than ever right now with so many people not working or having missed work because of COVID. It’s money we were told we were going to get."

Checks should be on their way to eligible employees this month and should arrive on or before Feb. 12, according to Warn Lawyers, the law firm representing the employees. The checks will have attorneys’ fees, expenses, class representatives’ service payments, and applicable payroll taxes deducted, according to Warn Lawyers. 

The employees had to fight and press the former retailer's estate for the severance funds and in spring 2020 attorneys representing the employees reached a $3 million settlement with Shopko's estate, which continues to wind down in federal bankruptcy court. 

Former employees eligible for the settlement had until Tuesday, Feb. 2 to provide updated contact information to the law firm, according to the Warn Lawyers' Shopko Settlement web page. The website directs former employees to a contact form they can fill out with updated contact information or to ask questions. Requests sent to Warn Lawyers for more details have not been returned. 

RELATED:Bankruptcy judge approves $3 million for 4,000 former Shopko workers promised severance

Shopko originally hoped to find a buyer who would keep some of the general merchandise chain's 360 stores open, but no buyer emerged, so the company pivoted to liquidation in March 2019. 

When it shifted toward liquidation, company executives sent employees a "severance memorandum" that promised two or four weeks' pay, based on their tenure at Shopko, if they would work through the store closure. 

Van Beckum said a lot of her coworkers in the Madison area opted to stay, putting off job searches or declining job offers. Employees at other Shopko stores reported making similar decisions based on the offer. 

The severance payments never arrived, though.

"They weren't actively looking for another job because if we stuck around, we'd get a severance," Van Beckum said. "So many things were wrong with that situation."

In May 2019, five eligible employees filed an objection in bankruptcy court to Shopko's plan to liquidate its assets, pay creditors what it could and wind down operations without paying employees the severance. 

In spring 2020, attorneys for Shopko and the employees agreed on the terms of the $3 million settlement. The fund included $753,000 for legal fees and $1,000 "service awards" for each of the five former employees who led the claim. U.S. Bankruptcy Judge Thomas Saladino approved the settlement agreement in October. 

The settlement does not cover all Shopko workers, though. 

About 2,000 employees who helped close the last Shopko stores in late June 2019 and employees who worked in the corporate office did not receive a severance offer and are not eligible for the severance payments approved Thursday. Some continue to press for their own settlement. 

Van Beckum said she hopes those employees, as well as other retail workers facing store liquidations, draw a little inspiration from her and her coworkers. 

"You actually can win," Van Beckum said. "It gives a message of hope to other people who are going through something similar. So many businesses are going under, not just because of private equity firms, and they prioritize upper management instead of the people who close these stores through liquidation."

United for Respect, a nonprofit group that advocates for policy changes on behalf of retail workers, pledged to keep advocating for Shopko workers and other people who work in retail. United for Respect has helped Shopko employees press private equity firm Sun Capital Partners, which owned Shopko, to establish an employee severance fund since June 2019. 

"Shopko employees who gave decades to the company had their severance inexcusably eliminated right before the bankruptcy, while the wealthy owners of Sun Capital make a killing on the deal," said Eddie Iny, director of the nonprofit's corporate accountability program, in an emailed statement. "United for Respect will continue to advocate these and for all affected workers and build the movement to hold private equity firms on Wall Street accountable for their predatory practices that turn retailers into chop shops and leave working people without jobs, health care, or fair compensation."

Any money remaining in the severance fund after 180 days will be paid to employees who filed their own, individual claims against the company. Anything left after that will be distributed between the Brown County United Way and Feeding America Eastern Wisconsin.

Contact Jeff Bollier at (920) 431-8387 or jbollier@gannett.com. Follow him on Twitter at @GBstreetwise.