Hudson’s Bay gets permission to sell leases, extend creditor protection

A liquidation sale at a Saks Off 5th store in Ottawa, Friday, March 28, 2025. THE CANADIAN PRESS/Craig Wong

TORONTO - Hudson’s Bay is set to shave off a sliver of its debt after getting court approval for two lease deals, but is still gearing up for a fight on a third lease agreement later this month.

Ontario Superior Court judge Peter Osborne gave the collapsed retailer permission Thursday to sell six of its leases.

Five will be bought for $5.03 million by YM Inc., which owns a slew of mall brands including Bluenotes, Urban Planet, Suzy Shier and West 49.

The leases were held by Saks Off Fifth, a discount retailer run by the Saks Canada chain, until the Bay closed its 80 stores and all 16 under the Saks banners in the country earlier this year.

The leases cover stores at Vaughan Mills in Vaughan, Ont., Tanger Outlet in Kanata, Ont., Outlet Collection in Winnipeg, CrossIron Mills in Rocky View, Alta., and Toronto Premium Outlets in Halton Hills, Ont.

YM has not said which of its brands will move into each site, but the Bay said in court filings made last week that the landlords of all five properties have given their blessing to the prospective new tenant.

YM originally had even bigger ambitions. When it inked a deal with the Bay on May 28, it wanted to buy the leases at Pickering Town Centre in Pickering, Ont., Skyview Power Centre in Edmonton, and Midtown Plaza in Saskatoon for $1 million, but landlord waivers weren’t secured for those properties.

In addition to the YM transaction, the Bay got court permission to move forward with another deal it struck to sell its lease at Metrotown in Burnaby, B.C., to Ivanhoe Realties Inc. for $20,000. Ivanhoe Cambridge, the parent company of Ivanhoe Realties, owns the mall and thus, the transaction is not facing opposition.

The two deals were the result of a process, which saw the Bay put its leases up for sale. One dozen bids for a collective 39 properties came in.

Ivanhoe’s bid was not initially accepted because of its low price, the Bay has said in court documents. However, negotiations eventually helped the parties come to an agreement.

The deals will help the Bay address the $1.1 billion in debt it had when it filed for creditor protection in March. Nearly $1 billion of that money was owed to a 26-page list of creditors, including prominent lenders, utilities providers and fashion brands.

Money has started to flow to creditors now that liquidation sales at the Bay and Saks have concluded but much of the cash is still outstanding and on Thursday, Osborne prolonged the retailer’s period of reprieve from creditors to at least Oct. 31.

The Bay said the extension will give it more time to prepare its art and artifacts for auction and get approval to sell 25 more leases to B.C. billionaire Ruby Liu.

Liu already bought three leases at B.C. malls she owns but wants about two dozen more. She has said she would use the sites to open a new department store she will name after herself.

Originally, her plan said the department stores would include dining, entertainment, retail and recreational activities but recently, plans she submitted to court dropped those elements.

Most landlords are vehemently opposed to her moving in and have criticized her for not providing enough information about the business she intends to build in their properties.

However, Bay lawyer Ashley Taylor revealed Thursday that Liu has been generating some support. He told Osborne that she has entered into a consent agreement with Triple Five Group, which owns the West Edmonton Mall.

Taylor said Liu is “very close” to signing a similar agreement with another landlord he did not name.

Earlier this week, Liu generated plenty of attention when letters she sent to Osborne were entered into the court record, prompting the chief justice’s office to remind her people should not directly contact judges presiding over their cases.

Linda Galessiere, a lawyer for several landlords, said in court Thursday that she was “quite surprised” by the letters and “very troubled” by their contents.

In the letters, Liu asked Osborne to “please give me a chance” and revealed the Bay had repeatedly threatened to cancel her deal because she was not taking steps the retailer thought was necessary to appease landlords and get a deal done.

But rather than pull the deal or seek concessions from Liu because of her alleged inaction, the company took another tact.

It presented her with an opportunity to save $3 million on her deal, if she hired the retailer’s former CEO as a consultant and KPMG as a financial adviser.

Brian Kolenda, a lawyer for one of the Bay’s lenders, said in court Thursday that such actions raise “legitimate questions about the conduct of this proceeding and who has conducted themselves in good faith along the way.”

By Tara Deschamps