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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under The Securities Exchange Act of 1934

(Amendment No. 5)*

(a-e) As of the
date hereof, Fairholme may be deemed to be the beneficial owner of 16,898,877 Shares (16.6%) of the Issuer, based upon the 101,877,662
Shares outstanding as of June 13, 2017, according to the Issuer. Fairholme has the sole power to vote or direct the vote of 0 Shares,
Fairholme has the shared power to vote or direct the vote of 15,545,093 Shares, Fairholme has the sole power to dispose or direct
the disposition of 0 Shares and Fairholme has the shared power to dispose or direct the disposition of 16,898,877 Shares to which
this filing relates.

The Fund
may be deemed to be the beneficial owner of 11,784,115 Shares (11.6%) of the Issuer, based upon the 101,877,662
Shares outstanding as of June 13, 2017, according to the Issuer. The Fund has the sole power to vote or direct the vote of 0
Shares, the Fund has the shared power to vote or direct the vote of 11,784,115 Shares, the Fund has the sole power to
dispose or direct the disposition of 0 Shares and the Fund has the shared power to dispose or direct the disposition of
11,784,115 Shares to which this filing relates. Of the 11,784,115 Shares deemed to be beneficially owned by the Fund,
10,075,672 are owned by The Fairholme Fund and 1,708,443 are owned by The Fairholme Allocation Fund, each a series of the
Fund.

Mr. Berkowitz may
be deemed to be the beneficial owner of 17,241,837 Shares (16.9%) of the Issuer, based upon the 101,877,662 Shares outstanding
as of June 13, 2017, according to the Issuer. Mr. Berkowitz has the sole power to vote or direct the vote of 342,960 Shares, Mr.
Berkowitz has the shared power to vote or direct the vote of 15,545,093 Shares, Mr. Berkowitz has the sole power to dispose or
direct the disposition of 342,960 Shares and Mr. Berkowitz has the shared power to dispose or direct the disposition of 16,898,877
Shares to which this filing relates.

The trading dates,
number of Shares purchased or sold and the price per share for all transactions in the Shares during the last 60 days by the Reporting
Persons are set forth in Exhibit 99.2 and were effected in the open market.

The Reporting Persons
specifically disclaim beneficial ownership in the Shares reported herein except to the extent of their pecuniary interest therein.

SIGNATURE

After reasonable inquiry and to the best
of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (see 18 U.S.C. 1001).

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,
that the undersigned constitutes and appoints Paul R. Thomson, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his capacity as the controlling person of the sole member of Fairholme Capital
Management, LLC, for the sole purpose of signing on his behalf any and all Regulatory Filings under the Securities Act of 1933,
the Securities Exchange Act of 1934, the Investment Advisers Act of 1940 and any amendments and supplements thereto, and to file
the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite
and necessary to accomplish the above, as fully as to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, and may lawfully do or cause to be done by virtue hereof. This Power of
Attorney shall continue effective until revoked by me at any time.

Dated this 22nd day of August, 2017.

Fairholme Capital Management, LLC

By: Fairholme Holdings, LLC, Sole Member

Exhibit 99.1

AGREEMENT

The undersigned agree that this Schedule
13D/A dated August 22, 2017 relating to the Common Shares of Sears Canada Inc. shall be filed on behalf of the undersigned.

Exhibit 99.2

TRANSACTIONS IN SHARES BY ACCOUNTS ADVISED
BY FAIRHOLME CAPITAL MANAGEMENT, L.L.C