Hudson’s Bay Co.
wants an Ontario court to dismiss a motion brought forward by its senior lender that is trying to cancel the sale of its leases to billionaire
Ruby Liu
, according to a new court document.
The retailer inked an agreement to sell up to 28 leases in Ontario, Alberta and British Columbia to Liu’s Tsawwassen, B.C.-based company, Central Walk, on May 23. An Ontario court approved the sale of three of those leases, but the remaining 25 have yet to be approved.
Hilco Trading LLC, one of HBC’s lenders, said in a separate court document that the retailer has “incurred exorbitant rent costs and professional fees in trying to obtain the necessary landlord consents” to complete the deal and has “nothing to show for it despite the landlords having indicated long ago that no consent will be provided.”
A motion to approve the deal has not been brought up in more than a month, the lender said.
“Due to the exorbitant costs associated with the failed … transaction,” the lender said it wants the court to terminate the transaction.
In an affidavit, HBC chief operating officer Michael Culhane said Hilco was always aware of the different steps taken by the retailer and that the lender also “signed off” on the agreement with Liu.
He said the sale of the 25 leases will generate significant recoveries for the company, which is trying to return millions of dollars to its creditors. The sale of the three leases garnered $6 million for the company, he said.
Culhane also said the approval of the sale of the three leases prior to the other 25 was intentionally designed to ensure HBC could “mitigate anticipated costs,” including rent.
“Hudson’s Bay recognized and identified the potential difficulties or delays which could be faced given that Central Walk may not be viewed as an established retailer by the landlords,” he said. “However, Hilco, Pathlight (Capital LP) and the monitor supported the applicants pursuing the transaction.”
Culhane said Hilco’s problem is more of an “intercreditor issue” with Pathlight, another senior lender.
“It is neither fair nor credible for Hilco to feign surprise or seek to criticize (HBC) for matters that were foreseeable, inevitable and/or, in many instances, driven by or contributed to by Hilco’s own conduct and commercial decisions,” he said. “I believe that it is in the best interests of the applicants and their stakeholders that this court dismiss the Hilco motion in its entirety.”
Canada’s oldest department store filed for bankruptcy protection under the Companies’ Creditors Arrangement Act on March 7. It has been selling its leases, intellectual property rights and artifacts and cut its workforce to pay back its creditors ever since.
• Email: nkarim@postmedia.com
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Hudson's Bay fights back against lender that wants to terminate lease sales to Ruby Liu
2025-07-14 16:17:25
