Jul. 14, 2025 "Hudson's Bay fires back at lender seeking termination of Ruby Liu deal: court docs": Today I found this article by Tara Deschamps on CBC:
Hudson's Bay is firing back at one of its biggest lenders.
A new court filing from the defunct department store's chief financial officer pushes back on the lender's calls to subject the retailer to more oversight because it allegedly mishandled its liquidation and is hopelessly pursuing a deal to sell 25 of its leases.
In the documents, Michael Culhane says it's "neither fair nor credible" for Hilco Global to criticize the retailer for "matters that were foreseeable, inevitable and/or, in many instances, driven by or contributed to by Hilco's own conduct and commercial decisions."
Financial services firm Hilco owns the Bay's lead liquidator Hilco Merchant as well as Restore Capital, one of the retailer's major lenders.
"Indeed, many of the results about which Hilco now complains
are a direct consequence
of Hilco's own actions
taken in its various capacities or were outcomes
Hilco knew
or should have known could occur
when Hilco agreed to and participated in the various processes that it now criticizes,"
Culhane says in an affidavit filed to the Ontario Superior Court on Sunday.
Restore Capital was among a group that loaned the Bay $151.4 million last December. It accused the retailer last week in a court filing of frittering away lenders' collateral by pushing a deal to sell about two dozen leases to B.C. billionaire Ruby Liu.
Liu, who owns three malls, wants the 25 properties in Alberta, B.C. and Ontario to open a new department store named after herself. She has already bought back leases to three properties at her own malls used by the Bay and its sister Saks business for $6 million.
However, landlords have objected to her buying their leases because they say she has not provided a sufficient business plan, despite the Bay announcing its deal with her on May 23.
Restore said last week that it will ask a court on Tuesday to terminate the deal, which still needs landlord and court approval.
On Saturday evening, it filed more documents bolstering its arguments and calling the Liu deal the "most striking" example of why its confidence in the Bay's management "has fully unravelled."
It said the "illusory" deal is a "misadventure" that is costing Restore and other lenders millions in rent and professional fees,
which may increase the longer the Bay waits to seek court approval for the transaction.
"If the transaction fails, no proceeds will be realized and the astounding costs incurred, and to be incurred, in its pursuit, will never be recouped," Restore warned.
Culhane maintains the sale should move ahead because it will generate "significant" cash and the retailer doesn't have any alternative transactions with a higher prospect of completion.
Court documents show Liu made a deposit of $9.4 million, which would equate to a purchase price of $94 million for 25 leases.
Culhane says lenders stand to reap the rewards of the Liu deals, another unspecified lease transaction the company will seek approval for at the end of July and an auction the Bay plans to hold to sell its art and artifacts.
He also revealed the company thinks its lenders will eventually be paid in full because it is pursuing creditor access to a surplus from its employee pension.
Culhane, who doubles as the Bay's chief operating officer, used the remainder of his affidavit to fight Restore's push to expand the powers of Alvarez and Marsal, the monitor previously appointed to guide the Bay through the creditor protection process.
If the court doesn't agree to a "super monitor" arrangement, Restore suggested appointing Richter Consulting Inc. as a receiver.
Restore said this is necessary because the Bay bungled its liquidation by failing to close stores properly and remove fixtures and equipment.
But Culhane points out that Hilco, along with Gordon Brothers, Tiger, the GA Group and SB360 Capital formed a syndicate to run the Bay's liquidation, after the retailer filed for creditor protection in March.
That syndicate meant Hilco — Restore's owner — was involved in the liquidation on a daily basis. It had supervisory staff at each of the Bay's stores and the syndicate had sole discretion to determine the timing and pricing for furniture, fixtures and equipment sales. Syndicate members were also eligible to receive a 15 per cent cut of these sales.
Culhane said Hilco projected sales of the fixtures would reach about $17 million, excluding sales taxes, but the actual figure was closer to $10.7 million.
It attributes the $6.3 million shortfall to the delayed start and shorter timeline for sales, the extended use of fixtures to display goods late into the process and the failure to secure buyers who wanted large quantities of products.
Another key factor was the failure to discount furniture, fixtures and equipment "appropriately and aggressively" to ensure sales, despite the Bay's repeated requests for greater discounting, Culhane said.
https://www.cbc.ca/news/canada/british-columbia/hudsons-bay-fights-lender-ruby-liu-deal-1.7584686
Jul. 15, 2025 "Hudson's Bay hearing on lease deal adjourned, Ruby Liu appears without lawyer": Today I found this article by Tara Deschamps on CBC:
B.C. billionaire Ruby Liu and her bid to buy up to 25 Hudson's Bay leases was due to come under further scrutiny in court Tuesday — but the battle was waylaid when she showed up with no lawyer or materials to aid in making her case.
Judge Peter Osborne adjourned the Tuesday hearing, telling Liu, "I not only urge but recommend in the strongest terms" that she hire a lawyer to represent her and her plans to buy the leases.
"There are significant concerns being expressed about those plans, so it is important for me to hear from you fully about what those plans are," he said.
Liu signed deals with the Bay in May to buy up to 28 leases in Alberta, B.C. and Ontario belonging to the defunct retailer and its sister banner Saks. She planned to use the properties to open a department store named after herself.
Three of the spaces in B.C. malls she owns were transferred to her last month after receiving court approval.
The Bay has yet to seek that assent for up to 25 more in properties held by other landlords, who are overwhelmingly opposed to Liu moving in because they say she's yet to provide detailed business plans.
Documents filed in the lead up to Tuesday's hearing in Ontario Superior Court, showed Bay lender Restore Capital LLC and its affiliate Hilco Global were due to join the opposition.
Restore, part of a group that loaned the Bay $151.4 million, planned to ask Osborne to terminate the retailer's 25-lease deal because it is "uneconomical and imprudent."
The longer the Bay goes without landlord or court approval, the more Restore's collateral is being "frittered away," the firm said.
Alvarez & Marsal, the monitor previously appointed to guide the court process, estimated it's costing at least $4.7 million in rent, property taxes, utilities and other fees each month that the Liu deal goes unapproved.
Liu says she was dropped by lawyer after disagreement
In a filing made just after midnight on Tuesday, it said it wrote to Liu repeatedly reminding her of her obligations and seeking information that could be used to get the court to assign her the leases without landlord approval.
The monitor said Liu has "not meaningfully responded," provided landlords with more information that could get them onside or even taken the "most basic and necessary steps" to advance her bid.
Liu previously provided landlords with information about her plans and believes they will welcome her if a court assigns her the leases.
"We will work closely with HBC and have already hired experts," Liu told Osborne on Tuesday, speaking in Mandarin that was translated by Linda Qin, the CEO of her company. "We are ready to open the stores."
Liu said she intends to hire a new lawyer. She was previously represented by both Cassels Brock & Blackwell LLP and Miller Thomson but has parted ways with each.
Gavin Finlayson, a Miller Thomson lawyer, appeared in court to confirm he was no longer representing Liu, but did not say why.
Speaking to reporters outside the courthouse later, Liu said she had been dropped by her lawyer "all of a sudden" on Sunday after a disagreement over whether his firm should be paid $3 million more to represent her.
Miller Thomson said Liu's statement is "not factually correct."
"We cannot speak to the details of our engagements or proposed engagements due to our professional obligations," the law firm said in an email.
Liu said her legal counsel was the topic of a letter she sent Osborne, but declined to offer further details. Osborne had advised her during the court session that parties are not to communicate with the judge outside of the hearing.
Osborne pressed Liu to find a lawyer in part because it will help her navigate the Bay's creditor protection case, which began in March, when the retailer admitted it was unable to cover bills and had no hope of finding lender support.
Landlords criticize Liu's plans for the Bay
A sales process uncovered no one willing to buy the business, so it liquidated all 80 of its stores and 16 Saks locations.
The company got 12 bids for 39 leases but chose Liu to buy 28 because the terms she offered were "the most favourable."
A copy of the agreement she entered with the Bay was given to the court over the weekend but sealed. Prior filings, however, show Liu made a deposit of $9.4 million, which would equate to a purchase price of $94 million for 25 leases.
A package prepared by Liu's former lawyers and obtained by The Canadian Press in early June shows she told landlords she could open stores within 180 days of receiving leases and would pour millions into rehabilitating properties.
Landlords almost immediately panned her plans, saying she doesn't have the
suppliers,
financing
or retail management experience
to run a department store.
Bay lawyer Ashley Taylor told Osborne there has since been "an ongoing dialogue" between Liu and stakeholders. David Bish, who represents Cadillac Fairview, disagreed and said the landlords remain "deeply concerned."
"This is the hill to die on for landlords," Bish said.
To aid in the Bay's wind down, Restore wants the court to appoint a "super monitor" to subject the department store chain to even more oversight.
If the court doesn't agree to a "super monitor" arrangement, Restore suggests appointing Richter Consulting Inc. as a receiver.
The Bay argued it doesn't need more oversight because it's properly governed. It maintains the Liu deal is the best shot it has at recovering more cash for creditors.
Pathlight Capital LP, one of the Bay's other lenders, supports the Liu transaction
but won't finance the extra time it could take to close the deal.
Meanwhile, the monitor said more oversight may be appropriate at some point. It's prepared to step up, when necessary.
Its report also revealed the Bay has several other lease deals in the works. One has been reached with a landlord wanting to buy its own lease for less than $250,000. Another is with an unnamed party wanting seven leases.
https://www.cbc.ca/news/canada/toronto/hudsons-bay-court-ruby-liu-toronto-1.7585278
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