Hudson’s Bay has decided to return its former store locations to the landlords, effectively putting an end to B.C. billionaire Ruby Liu’s attempt to acquire the leases of the collapsed retailer.
Franco Perugini, the senior vice president of real estate and legal at HBC, stated in an email to The Canadian Press on Monday that the company is disclaiming the leases for 25 properties that Liu sought to purchase.
A disclaimer, a legal tool that terminates a lease before its expiration, relieves the tenant of obligations such as rent payments and property upkeep.
Perugini mentioned that unless any landlord opposes the disclaimer, the HBC leases will be terminated by November 27.
Linda Qin, a representative for Liu, did not provide an immediate response regarding the disclaimers.
HBC vacated its 80 stores and an additional 16 under the Saks banners during the summer after filing for creditor protection and selling off its inventory.
When the leases were put up for sale, Liu aimed to acquire up to 28 of them with the intention of launching a new department store bearing her name.
HBC supported this plan and swiftly obtained court approval for Liu to purchase three locations in B.C. malls she owned, including Woodgrove Centre, Mayfair Shopping Centre, and Tsawwassen Mills.
However, the remaining 25 leases were fiercely contested by landlords such as Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. They opposed Liu’s tenancy, arguing that her business plan was inadequate and she lacked experience.
Even though Liu asserted she was capable of assuming the leases and offered to invest millions in hiring, inventory procurement, and site renovations to revitalize the locations.
HBC had a strong incentive for the sale as it owed approximately $1.1 billion to numerous creditors when the wind-down process began, and Liu represented a significant opportunity to recover some of those funds.
Nevertheless, last month, HBC lost the legal battle when a judge sided with the landlords, expressing doubts about Liu’s ability to fulfill the lease terms.
Following this ruling, HBC did not indicate whether it would challenge the decision, but the lease disclaimer suggests it will not continue to pursue the sale.
Josh Burleton, a spokesperson for Oxford Properties, mentioned in an email on Monday that HBC’s decision to disclaim the leases brings clarity to the complex and costly process, enabling them to progress.
Oxford’s primary focus throughout HBC’s wind-down has been safeguarding its assets to support employees and pensioners. Oxford is the real estate arm of the Ontario Municipal Employees Retirement System, responsible for managing the pensions of over 600,000 plan participants.
