On Monday, March 17th, there was an important hearing with the Supreme Court of Ontario about the future of the Hudson's Bay Company.
However, the judge did not decide on the triggering of the liquidation before the chair of the creditor protection and the restructuring procedure and chose more time to process the information submitted by the retailer, the landlord, landlords and other interest groups.
No decision by the court was made at the time of the letter, but it could come quickly at any time, maybe later this week.
Hudson's Bay was unable to pay rental contracts, sellers and credit obligations and is just a few days before a missing salary statement.
Liquidation was identified as the only important way for the company to secure preliminary financing, and the company may close at least half of its 80 department stores. A complete closure of all locations is also possible.
The meeting on Monday was the first since the Federal Companies' Credors Arrangement Act (CCAA) on March 7, in order to submit protection against creditors before the company's assets and real estate. This initial protection for a period of 10 days was granted by the court.
In addition to the landlords of the shopping centers who strive for unpaid rent, some of the largest interest groups in Hudsons Bay pack back against the restructuring of the company due to their deep known the financial situation of the retailer.
The Riocan Real Estate Investment Trust has gone so far to call the CCAA registration as “disappointing”, and now wants to offer its own stakeholders a certain confidence in repeating their investments in Hudson's Bay. They suggest that Hudson's Bay's strategy to go forward must be “fair and balanced terms”.
Some of the largest locations of Hudsons Bay of the greatest historical importance and in first -class locations for foot traffic are connected to Riocan in a joint venture from 2015 (JV). This joint venture is largely controlled by Hudson's Bay, which has 78 percent of the partnership. Riocan has the remaining 22 percent.
In a statement, Jonathan Gitlin, President and CEO of Riocan, emphasized a potential strategy to secure new retailers for the deputies of Hudsons Bay locations or to pursue a renovation.
“The HBC locations in the JV include Prime real estate in the most important markets of Canada, which are worth taking up as operational retail centers or renovation options,” said Gitlin.
The company emphasized that it would use its comprehensive leasing and development skills to achieve the best possible result for every Bay immobilia from Hudson held by the joint venture.
“Our team has proven success record in the search for solutions for free space and will work to protect the value of the real estate in the JV. This process will take time, specialist knowledge and cooperation between all participants. With a strong core business, team and balance sheet is well positioned in order to navigate this situation.
This joint venture Owns 12 Hudson's Bay Locations in Total Comprising Five Freehold Stores (Downtown Vancouver, Downtown Montreal, Downtown Ottawa and Devonshire Mall in Windsor) and Five Head Leasehold Stores (Yorkdale Shopping Center and Scarborough Town Center in Toronto, Square One Shopping Center in Mississauga, and Carrefour Laval and Promenades St. Bruno Near Montreal).
There are also two shops that belong together to the joint venture and Riocan (Oakville Place and Georgian Mall in Ontario) and each involved 50 percent.
Before the existential crisis of Hudson's Bay, the renovation plans for the flagship store in downtown Vancouver were slipped.
In 2022, the retailer announced his proposal to achieve a renovation with a high density that preserves the existing facade for the Heritage building, offers a 12-story vertical expansion, generates about one million square meters.
However, an application to rededicate has to be submitted, and since the first announcement of the renovation plans, the business in downtown Vancouver has deteriorated due to the extreme maintenance.
At the moment, all elevators and escalators are not operational and blocked, so that the individual emergency staircase is given the only way to access the seven retail levels for customers and employees.
2022 Artistic representation of the renovation of the Vancouver Flagship Store in Hudsons Bay in 674 Granville St. (Perkins & Will/Streetworks Development/Hudson's Bay Company)
It was expected that some revisions of the proposed renovation design reduce the size of the office space component for the introduction of some secure, specially built rental apartment uses.
Although this is a long -term solution, Riocan wants to stop short -term bleeding with legal means.
By the end of 2024, the Joint Venture of the Riocan-Hudson's Bay had a load value of $ 249 million or 3.3 percent of equity. In addition, Riocan has provided a total of 88.7 million US dollars to loans to Hudson's Bay through the joint venture.
It also provided a guarantee of 100 percent for the first mortgage of 75 million US dollars in the Yorkdale shopping center of joint venture, a loan of 24.5 million US dollars for refinancing the Georgian Mall Store location and a loan of $ 14.2 million for the refinancing of the business in the city center of Ottawa.
According to Riocan's application to the court on March 14, to protect itself from the retailer's CCCA submission, the persistent profession of Hudsons Bay and the use of the rented locations of the joint venture is a value of around 10 million US dollars per month in the income from the rental agreement.
Riocan is particularly concerned because Hudson's Bay is only ready to honor about 15 percent of these monthly contractual obligations for contractual rent.
Riocans' lawyers asked the court to remove the suspension of the rent payment from Hudson's restructuring plan from Hudsons Bay, and let the retailer pay other obligations that he owes the joint venture and the Riocan.
Riocan warns that the joint venture, without these rent payments, has difficulty doing his debt service for various mortgages in connection with these properties. In several properties, their mortgages will soon be mature this year, and the “ability to refinance such mortgages will be negatively influenced if they do not receive payments due to the culprit contractually agreed rent.”
Fast Approaching is the Matura of A $ 202-Million Mortgage for the Downtown Vancouver Store On April 30, 2025, Followed by the Maturities of A $ 105-Million Mortgage for the Downtown Calgary Store in August 2025, A $ 87.4-Million Mortgage Place Shopping Center Store So in August 2025, and a $ 161-million Mortgage for the Downtown Montreal Store in October 2025.
“It is Riocans's view that the renting of the rent should not be approved on the basis of all facts and circumstances, including because the tenancy pension is caused by essential prejudices against Riokan, which causes joint venture (JV) entities and the creditors and other stakeholders of the JV entities,” says Riocans.
“The rental pension conditions are not appropriate or appropriate in relation to the JV companies.
“The fact is that HBC has the JV companies in relation to the rental agreement or the subletting of the 12 properties in the JV portfolio.
Conversely, Hudson's Bay argues that the tenancy board is a strategic measure to protect the 354-year-old company from irreparable breakdown.