Hudson’s Bay waiting for the court order to settle stores

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Hudson’s bay is still trying to obtain a court order that allows him to start liquidating his points of sale, but a key real estate partner says he is disappointed by how the oldest departments stores in the country seek to restructure.

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Riocan Real Estate Investment Trust, one of the largest reit in Canada and Hudson’s Bay are part of a joint company that runs several HBC stores in main locations.

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Hudson Bay has asked an Ontario court to temporarily exempt it from payments linked to the joint company, since it seeks to recover financial stability, but Riocan said on Tuesday that it was “essential that any restructuring step is in fair and balanced terms.”

Riocan also said that “he will pursue All commercial and legal routes available “, and will take advantage of their” lease and development capabilities to achieve the best possible result “for the properties in the joint company.

Almost two weeks after seeking protection of their creditors, Hudson’s Bay’s lawyers returned to courts on Monday in the hope of obtaining an order that would continue to protect it from their creditors until mid -June and allow him to start liquidating his points of sale.

If your proposal is approved by the Court without any change, you can start selling your inventory, furniture and equipment of the 96 stores in Canada to help pay the creditors. The sale must be completed before June 15, said a presentation of the company. Certain stores can be excluded from the liquidation process.

The court that manages the case of Hudson’s Bay has not yet provided a decision.

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The closure of Hudson’s Bay, which employs about 9,360 people, would “drastically” the dynamics of shopping centers nationwide by eliminating a “great anchor and customer trafficking driver,” the company said in a statement on Friday.

As such, the company is talking to key stakeholders, such as owners, to create an alternative route that can preserve jobs and possession in retail locations. But this would also require a significant amount of capital, which the company has failed to obtain in the recent past.

“Our team has worked incredibly hard to identify a viable way to follow,” said Hudson’s Bay executive director Liz Rodbell, in a statement on Friday, adding that the company “would seek all possible opportunities to ensure the necessary support of the key owners and other interested parties to save the bay.”

On March 7, Hudson’s Bay decided to seek protection of his creditors through the Law of Creditors of the Companies. The application was granted by the Court on the same day.

Judge Peter Osborne, who heard the application in the Superior Court of Justice of Ontario in Toronto, said it was “difficult not to have a sense of melancholy when considering” the request, according to a presentation of the court on March 10 that explained why the application of Hudson’s Bay was accepted.

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“Hudson’s Bay is the oldest company in North America and a very prominent Canadian department store,” he said. “It was founded in 1670. Now, approximately 355 years later, it is insolvent and seeks protection of its creditors.”

Judicial presentations seem to suggest that he has been suffering financially for some time.

Like many other physical stores, the retailer, who has 80 full line stores throughout the country, fought to compete with electronic commerce players, he said in the presentation of the Court.

To address these challenges, the company said it was deprived in 2020 to “reposition its operations without” pressures and costs of the public market and concentrate on long -term growth strategies, but was soon affected by closures related to pandemic, which worsened its financial challenges.

With Hudson’s Bay stores under pressure, the company decided to follow an aggressive electronic commerce strategy between 2021 and 2022, investing around $ 130 million in the process. In 2023 and 2024, he also reduced his workforce and marketing budgets, obtained $ 200 million in financing and appointed a new CEO to design a change.

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The situation has worsened due to a commercial war between the United States and Canada, which has forced many investors to wait and observe instead of passing their plans, economists say. Hudson Bay said this has impacted discussions with possible lenders.

“Until recently, the company was confident that it could refinance all or part of its credit facilities and improve its liquidity position … However, the commercial war … made it extremely difficult … to raise incremental financing and monetize its real estate assets,” the company said.

As a result, Hudson’s Bay said that he faces “significant challenges” when paying his fees and that he has had to differ certain payments for “many months.” More recently, he could not pay “certain critical commercial creditors.”

Lawyers representing some Hudson Bay workers said in a presentation on Saturday that they were concerned about the future of “their work and the payment of their pension benefits and other benefits due to them.”

The company is also concerned that without the protection of the creditor, certain owners could “exercise self -help remedies”, such as lighting the company of its retail stores.

As an example, he said that an owner locked Hudson’s Bay from a store in Sydney, NS, on March 7, while a sheriff team tried to seize the merchandise of a store at the Sherway Gardens Mall in Toronto.

• Email: nkarim@postmedia.com

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