The 1670 royal charter signed by King Charles II establishing Hudson's Bay on display in a photo supplied by the Manitoba Museum.Supplied/The Canadian Press
The 1670 Royal Charter that launched the Hudson’s Bay Co., and played a pivotal role in Canada’s history, will be auctioned off on Dec. 3.
Ontario Superior Court Justice Peter Osborne gave the green light to the auction during a court hearing on Friday. A decision on the fate of the document was previously delayed after the Thomson and Weston families submitted a surprise joint bid for the document in late September, just hours before another hearing to approve the sale process.
The two prominent Canadian families had each submitted offers for the 355-year-old parchment before deciding to join forces on a bid. Both of their plans separately involved a permanent donation to a Canadian public institution – which is a requirement of the sale.
At Hudson’s Bay art auction, prospective buyers vie for a piece of history
How Ruby Liu’s contentious play for Hudson’s Bay stores fell apart
Together, the Thomsons and the Westons will offer $18-million, which will act as the opening bid in the auction. That bid was increased from the initial offer presented in late September, following talks with the company and its advisers.
The offer includes a plan for the Archives of Manitoba, the Manitoba Museum, the Canadian Museum of History and the Royal Ontario Museum to share ownership of the charter. The families would also donate $5-million to support the preservation of the parchment, and to fund consultations with Indigenous groups and other concerned parties on how it should be presented.
Justice Osborne acknowledged the “profound significance and importance” of the document during Friday’s hearing, and he said he was satisfied that the process would ensure the charter “remains here, and a part of our history.”
The royal charter, which carries the wax seal of King Charles II, granted the company a trading monopoly that covered the drainage basin of Hudson Bay – a vast swath of land comprising nearly one-third of what is now Canada. It also granted the right to exploit mineral resources and set out an obligation to search for the Northwest Passage.
In claiming dominion over the territory, the charter employed the doctrine of terra nullius, or “nobody’s land,” despite the presence of Indigenous peoples already living there.
Any other potential buyers would be required to permanently donate the charter to a Canadian public institution, and to bid more than $18-million. Bidders have until Nov. 28 to submit proposals to participate in the auction.
Government officials, Indigenous leaders, historians and cultural groups have all raised concerns about the fate of the charter since April, when The Globe and Mail first reported that Hudson’s Bay was considering selling the document to pay down its debts.
Canada’s oldest retailer was granted court protection from its creditors on March 7, as it faced a financial crisis and carried more than $1-billion in debt. After Hudson’s Bay failed to secure additional debt financing, or to find new investors for a plan to save even a handful of its stores, all its locations across Canada closed their doors permanently in early June.
An open auction had been the initial plan for the sale of the charter, but in July, the company instead sought court approval for a direct sale to the billionaire Weston family’s holding company, Wittington Investments Ltd. Wittington had offered $12.5-million for the document, with a $1-million donation to support consultations, and a plan to donate it to the Canadian Museum of History.
But then in August, Canadian businessman David Thomson signalled his interest in bidding at least $15-million for the charter. His plan was to donate it to the Archives of Manitoba – which already holds a vast trove of Hudson’s Bay records, bequeathed to the archives in 1994 – with an additional $2-million donation. The offer came from Mr. Thomson’s personal family holding company, DKRT Family Corp. (Woodbridge Co. Ltd., another holding company and primary investment vehicle for the Thomson family, owns The Globe.)
In light of the interest from Mr. Thomson, as well as other bidders, the company abandoned the plan for a direct sale and sought the court’s approval for an auction process in late September. At that point, DKRT and Wittington decided to submit a joint bid.
Justice Osborne acknowledged at Friday’s hearing that the process had involved “a few twists and turns along the way.”
The live auction for the charter will take place at the offices of Stikeman Elliott LLP, the law firm representing the failed retailer. (Hudson’s Bay changed its name after selling its intellectual property, including brand names and logos, to Canadian Tire in a $30-million deal.) The highest bid will require court approval before the sale can be finalized.
“We’re doing everything we can to create a robust auction,” Ashley Taylor, a lawyer with Stikeman Elliott, said during Friday’s hearing. He added that the company expects the sale will maximize the proceeds that can be used to pay down the debts owed to its senior lenders.
Justice Osborne noted that the timing was “quite tight,” with less than two weeks to go before the proposed auction. Mr. Taylor replied that the company wanted to conduct the sale before the end of the year, because the joint bid expires on Dec. 31. He also told the court that because the charter auction was “notorious” after having received significant media coverage, it was likely any potential bidders would be aware of the sale and prepared to step forward.
Asad Moten, a lawyer with the federal Department of Justice, told the court that the government is satisfied that the auction includes sufficient safeguards to ensure the charter is preserved, and is publicly accessible.
The judge asked for some changes to the wording of the proposed court order approving the sale, partly to ensure that the rules around permanent ownership of the charter were clarified.
“I want it to be very clear that the donation to a Canadian public institution is irrevocable,” Justice Osborne said, adding that while it is important to maximize the proceeds from the auction to pay down the company’s debts, “so too is the preservation of the charter, maintaining it in Canada and ensuring the continued accessibility of the charter to Canadians.”
Editor’s note: A previous version of this article incorrectly stated that the royal charter contains the wax seal of King George II. It carries the seal of King Charles II.