A Hudson’s Bay store in Montreal in June, 2025. The failed retailer's former landlords are seeking roughly $2.4-million to cover costs from a legal battle over billionaire Ruby Liu's plan to take over 28 store leases.Graham Hughes/The Canadian Press
Former landlords of Hudson’s Bay are awaiting a court decision on a motion seeking roughly $2.4-million from the failed retailer, to cover costs in the legal battle that led to the court rejecting a B.C. billionaire’s plan to take over more than two dozen Bay store leases.
As Hudson’s Bay Co. auctioned off its assets in an attempt to recoup money to pay back some of its debts, real estate executive Weihong (Ruby) Liu won the bidding last spring for 28 store leases across the country.
But her plan to launch a chain of department stores named after herself was opposed by the landlords for the majority of those locations. They argued her plan was “doomed to fail” because her financial projections were unrealistic, and because Ms. Liu had no experience running a retail chain of that size. The court battle dragged on for months, and the judge decided against the deal last October.
Quebec department store set to take over two former HBC locations, filings show
In a court filing last November, the landlords – which include some of Canada’s largest commercial players, such as Cadillac Fairview Corp. Ltd., Oxford Properties Group, Ivanhoé Cambridge Inc. and others – argued they are owed legal costs because the case was “wholly avoidable.” Hudson’s Bay “knew the transaction was flawed,” they wrote, and it proceeded with seeking court approval despite objections to the deal raised by the court monitor overseeing the process.
“The shopping centres that stood to suffer from the proposed [lease] assignment are worth billions of dollars,” the court filing stated.
The parties are awaiting a decision on the motion.
Billionaire Ruby Liu at a Saks Off 5th department store after a handover ceremony in Tsawwassen, B.C., in June, 2025.DARRYL DYCK/The Canadian Press
Hudson’s Bay was granted court protection under the Companies’ Creditors Arrangement Act in March of 2025, as the money-losing company risked running out of cash, and struggled under roughly $1.1-billion in debt.
When legal disputes arise in CCAA proceedings, it is unusual for the court to force the losing party to pay the other side’s legal costs, as sometimes occurs in other cases. The landlords in this case argued that the Ruby Liu dispute was unusually “adversarial,” and that companies should not be protected under CCAA for “unreasonable litigation conduct.”
In response, the numbered companies formerly known as Hudson’s Bay (which sold its name and other intellectual property to Canadian Tire Corp. Ltd. CTC-A-T last year) asked the court to dismiss the landlords’ request.
The defunct retailer argued that such an award “would have a chilling effect on future CCAA proceedings,” if debt-laden companies are fearful of seeking court approval of deals to sell off assets because they might face such opposition.
The motion to approve the deal with Ms. Liu was brought in “good faith,” the defunct retailer’s filing stated, and it was not adversarial.
What it takes to preserve the 355-year-old Hudson’s Bay charter
Also opposing the motion are the former retailer’s senior lenders, who argued in filings in December that such a cost award would be a “windfall” for landlords who have already received $15-million in additional rent payments on their empty stores. That expense had to be paid because Hudson’s Bay held on to the store spaces while it awaited the court’s decision on its deal with Ms. Liu.
The senior lenders argued an award to the landlords would erode the value of the estate of the former Hudson’s Bay, which should be used to pay back existing debts.
The court filings also reveal that in August, just before a series of pivotal court hearings into the deal, the parties discussed a settlement, which was ultimately unsuccessful.
On Aug. 21, the day after the court monitor filed a report recommending the deal be rejected, the landlords suggested they dismiss the motion without costs. The landlords offered to accept a disclaimer of their leases as of Sept. 15, and would cover the cost of removing items from the stores such as fixtures, furniture and signage.
Three days later, the retailer made a counteroffer for a disclaimer retroactive to Aug. 15, if the landlords agreed to pay $29-million to Hudson’s Bay to abandon the deal. In its filing, the former retailer said this amount was reasonable because the deal with Ms. Liu, if approved, would have generated roughly $50-million in net proceeds. It also would have faced possible litigation by Ms. Liu’s team for breaching the deal, according to the filing.