Hudson's Bay is relinquishing control of 25 former store properties to their landlords, effectively concluding a legal battle initiated by British Columbia billionaire Ruby Liu. This move signals the end of Liu's attempt to acquire the leases of the collapsed retailer's former locations, which she had intended to use for a new department store venture.
Key Takeaways
- Hudson's Bay has legally disclaimed leases for 25 properties.
- This action ends Ruby Liu's bid to acquire these leases.
- Landlords had previously opposed Liu's takeover due to concerns about her business plan and experience.
- A judge had sided with the landlords, expressing "significant concerns" about Liu's ability to fulfill lease terms.
The Lease Disclaimer
Hudson's Bay, through its senior vice-president of real estate and legal, Franco Perugini, announced the disclaimer of leases for 25 properties. A lease disclaimer is a legal process that terminates a lease agreement before its expiration, thereby releasing the tenant from ongoing obligations such as rent payments and property maintenance. Barring any objections from the landlords, these lease terminations are set to become effective on November 27.
Ruby Liu's Acquisition Attempt
Ruby Liu, a B.C. billionaire, had expressed interest in acquiring up to 28 of Hudson's Bay's former store leases. Her ambitious plan was to establish a new department store bearing her own name. Hudson's Bay had initially supported this proposal, even securing court approval for Liu to purchase three leases for properties she already owned in B.C. malls: Woodgrove Centre, Mayfair Shopping Centre, and Tsawwassen Mills.
Landlord Opposition and Legal Ruling
The remaining 25 leases faced significant opposition from major landlords, including Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. These landlords raised concerns about Liu's business plan, deeming it insufficient, and questioned her experience. Despite Liu's assurances and offers to invest heavily in renovations, hiring, and inventory, the landlords resisted her takeover. Hudson's Bay, facing substantial creditor claims totaling approximately $1.1 billion, had pushed for the sale as a means to recover some of these debts. However, a judge ultimately ruled in favor of the landlords last month, citing "significant concerns" regarding Liu's capacity to meet the lease obligations. This judicial decision has now led Hudson's Bay to abandon its fight for the sale.
Moving Forward
Representatives for Oxford Properties acknowledged that Hudson's Bay's decision to disclaim the leases provides much-needed certainty and allows them to proceed. Oxford Properties, as the real estate division of the Ontario Municipal Employees Retirement System, emphasized its commitment to protecting assets that support employees and pensioners.
