U.S. court case sees Saks Global accuse lender of contributing to Bay’s demise

A Saks Fifth Avenue sign is shown in San Francisco, Sunday, March 17, 2024. (AP Photo/Jeff Chiu)

TORONTO — Saks Global is putting some of the blame for Hudson’s Bay’s demise on one of the faltering department store’s top lenders.

A letter Saks Global filed earlier this month in a New York lawsuit against Pathlight Capital LP said the lender was a “direct cause” of Hudson’s Bay’s inability to secure “much-needed financing.”

“As a result of these actions and inactions by Pathlight, HBC was forced to initiate restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA) in Canada,” Saks Global chief legal officer Andrew Woodworth said in a March 26 letter to Pathlight’s managing director.

“Pathlight’s ongoing intransigence further frustrated HBC’s CCAA proceedings, and, on March 21, 2025, forced HBC to announce a near total liquidation.”

After the letter was sent on March 26, Hudson’s Bay determined that it was not going to find the money it needed to keep all of its stores alive. With little hope left, Canada’s oldest company decided to take its liquidation even further and is due to sell off all merchandise at its 80 stores and 16 under the Saks name by Sunday.

The Saks stores in Canada were operated through a license Hudson’s Bay had with Saks Global.

Neither company nor lawyers for the firms or Pathlight immediately responded to a request for comment.

Saks Global was formed last year, when Hudson’s Bay purchased Neiman Marcus and Bergdorf Goodman and spun them out with its existing Saks Fifth Avenue into a new company.

Court documents say that transaction was made possible in part because Pathlight agreed to release Saks Global from obligations under a loan the Bay had in exchange for millions in payments.

Now, Pathlight is suing Saks Global because it has yet to be paid US$8.8 million it is owed.

Saks is refusing to pay the sum because it says Pathlight “cannot and should not benefit from its own actions,” which hurt the Bay.

At the start of Hudson’s Bay’s creditor protection case in Canada, Pathlight was listed as a secured creditor owed more than $95 million.

Tara Deschamps, The Canadian Press