Eaton's stakeholders voted overwhelmingly in support of the plan, which still requires court approval, preventing Eaton's from sliding into bankruptcy.
"The company and board are sorry that it was necessary to end up in this position but today we believe..the plan is the best possible solution in the circumstances," Eaton's Chief Financial Officer Hap Stephen told creditors.
Despite accepting the plan, some angry creditors said Friday that company executives, including members of the wealthy Eaton clan, mismanaged a profitable enterprise.
"Eaton's and these people basically screwed me," said an apparel supplier whose company went into bankruptcy protection one month after Eaton's did.
"Tell me why a company like Eaton's with the goodwill, the value, the position in the market that it has couldn't make money..instead of making everyone else lose their business?" he added.
Bitter creditors said the company, which nearly collapsed in 1997 before restructuring, should be allowed to fall into bankruptcy. If it did, the creditors would be paid marginally less than under Friday's restructuring plan.
"When a company is resistant to change, it deserves to die a quick death," said creditor Gary Pieters.
Under the plan Eaton's, which went into interim receivership in August, will pay unsecured creditors including suppliers and employees C$117.4 million, about half of their estimated C$234 million claim.
Landlords, who form a separate creditor class and voted 100 percent in favor of the plan, will get C$12 million out of an estimated C$117 million claim.
Eaton's shareholders, including the Eaton family who have a 52-percent stake in the company, voted 99.5 percent in favor of the plan and will be paid C$20 million but only after Sears Canada makes good on Eaton's tax losses.
Sears Canada offered to buy the Eaton's name, trademark, all the outstanding common shares and 19 stores, including five key downtown locations across the country for C$60 million, in two separate deals earlier this fall.
Sears agreed to pay a further C$20 million on realisation of tax losses estimated at about C$175 million.
Those funds form the backbone of the pool available to creditors. Eaton's also realized about C$207 million from its liquidation sale.
The unsecured creditors, who voted 99.92 percent in favor, will get paid beginning March, 2000.
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