Landlords are resisting the transaction of certain leasehold properties in Hudson Bay.
Retail Ruckus:
Hudson's Bay's lease sale deal swoons as property owners cry foul
Things are getting rocky for Hudson's Bay's lease sale agreement, according to fresh court papers. The owners of the real estate in question are unwilling to let go of their properties en masse, as revealed in documents filed Thursday.
These documents stem from Alvarez & Marsal Canada, a court-appointed monitor helping Hudson's Bay stay afloat amidst creditor threats. The documents note that owners representing 23 of the 25 leases acquired by Ruby Liu will not endorse the plan and will vehemently oppose any future forced transfer.
Hudson's Bay and a spokesperson for Ms. Liu maintained a vow of silence when approached.
Last month, Hudson's Bay raised eyebrows when they announced their choice of Ruby Liu to acquire up to 28 leases for the retailer and its sister brands, Saks, in Alberta, British Columbia, and Ontario. Among the leases were three located in British Columbia shopping centers owned by Ms. Liu herself: Tsawwassen Mills, Mayfair Shopping Centre, and Woodgrove Centre. Each of these sought-after properties carries a hefty price tag of $2 million.
On Monday, Hudson's Bay will present their deal to a court, but the 25-lease agreement hasn't been unveiled yet for Judge Peter Osborne's consideration, as they work tirelessly to secure the owners' approval.
Earlier this week, court documents hinted at landlord concerns, although specifics went unmentioned.
Ms. Liu's ambitious plan involves transforming these properties into a chain of innovation-driven department stores under her own name. These modernized powerhouses will feature makeup, jewelry, clothing, children's play areas, dining halls, and entertainment spaces. The question remains whether the Bay's leases permit such activities, and if not, whether the landlords will be compelled to submit to her vision.
Insiders say that Ms. Liu and her legal team are working diligently to provide the owners with detailed insights into her intended use of the spaces.
Legally, Hudson's Bay can request the court to transfer its leases to Ms. Liu even if the owners refuse to cooperate. The court must consider whether the appointed monitor accepts the transfer and whether Ms. Liu is financially sound and capable of fulfilling lease obligations before granting the order.
Beyond the transactions with Ms. Liu, court papers suggest that Hudson's Bay is actively hunting for tenants for its remaining leases. One party has shown interest in up to eight leases in Ontario, Alberta, Saskatchewan, and Manitoba, while another is on the cusp of finalizing a deal to purchase one of the leases for $250,000.
A previous lease transfer deal was called off when a corporation refused to rectify errors in the agreement and then backed out.
These lease-selling efforts come just a few months after Hudson's Bay, Canada's oldest company, sought protection from creditors, unable to bear the weight of growing debt. After selling its name and trademarks to Canadian Tire for $30 million, the retailer ultimately liquidated all its stores, closing their doors at the end of May.
The sale of goods belonging to La Baie brought in $349.3 million for the retailer. However, the sale exceeded projections due to a higher-than-anticipated volume of gift card exchanges and diminished interest in furniture, fixtures, and equipment.
As the legal drama unfolds, the fate of Hudson's Bay's remaining leases hangs in the balance, with Ruby Liu pushing ahead, despite the landlord opposition, and court rulings imminent to determine the future of her proposed purchases.
- The real-estate owners, representing 23 out of 25 leases acquired by Ruby Liu, have stated they will not endorse her plan and will vehemently oppose any future forced transfer, posing a challenge for the lease sale agreement in the business world.
- Hudson's Bay, in their financial endeavors, have been actively seeking new tenants for their remaining leases, with one party showing interest in up to eight leases, indicating ongoing investment opportunities in the real-estate and retail-finance sectors.
