The shutdown of Hudson’s Bay Company stores across Canada has already created dead zones in many shopping malls and their parking lots. But the legal action surrounding the defunct 355-year-old company continues almost with the intensity of its once-popular Bay Days sales.
The court hearings have recently focused on two separate issues. The first is an ambitious plan by Ruby Liu, a shopping mall owner in Nanaimo, British Columbia, to revive just over two dozen Bay stores, which faces strident opposition from the stores’ landlords.
As part of the Bay’s restructuring, Ms. Liu won a court-supervised auction to acquire 28 store leases in British Columbia, Alberta and Ontario for around 75 million Canadian dollars. Her plan is to spend 400 million dollars to improve and repair the properties, hire up to 1,800 employees and reopen the stores under her name.
Ms. Liu, in a court filing, said she had made her personal fortune by selling a shopping mall in China for about $1 billion before she became a permanent resident of Canada in 2017.
For three Bay stores in malls that Ms. Liu already owns, there was no problem with the lease transfers, which cost her 6 million Canadian dollars. But the landlords of 24 of the other 25 locations were in court on Thursday and Friday to argue that they shouldn’t be forced to accept Ms. Liu’s stores as tenants.
It may seem improbable that the landlords, most of which are owned by pension funds, wouldn’t welcome tenants into the spaces left behind by the Bay. After all, some are still stuck with empty space since Nordstrom and Target left the country and Sears Canada collapsed.
But the Bay and Ms. Liu contend in court documents that the landlords are balking because they don’t want to be bound in another agreement to the original terms of the leases, which no longer serve their needs. Many of the leases were designed to attract large department stores to malls and thus have very long terms: Most don’t expire until around 2090, and one runs all the way until 2203. And the rents in the leases are generally much lower than what other stores pay.
The landlords reject this characterization of their position. Rather, some told the court that Ms. Liu’s plans to introduce entertainment and dining in the stores broke lease conditions. All of them criticized her business plan as unworkable, underfunded and filled with implausible financial projections, and they said that given Ms. Liu’s lack of experience in running department stores, her new venture was destined to meet the Bay’s fate, perhaps quickly.
At times, Ms. Liu did not help her cause. She showed up at a court hearing on her multimillion-dollar plan without any lawyers.
Ms. Liu was also reprimanded for emailing Justice Peter Osborne of the Ontario Superior Court to say that upon first seeing him, she had felt an “unshakable belief that you were a person of justice and strength.” She had added, “Among so many lawyers who would do anything for money, how do you remain so steadfast, so confident, so noble?”
After two days of back-and-forth, Justice Osborne ended the court session Friday evening about two hours after its scheduled adjournment. He said that he would announce his decision at a later, unspecified date.
The second, unrelated legal action in the wake of Hudson’s Bay’s shutdown involves two of Canada’s wealthiest families, who between them will decide how many millions of dollars it should cost to buy the company’s original charter and then donate it.
In an earlier Canada Letter, I wrote that historians and archivists were concerned that the Hudson’s Bay Company’s charter granted by King Charles II, which was then up for auction, would remain in private hands.
“It could be considered not only a founding document of H.B.C. but also a founding document of Canada,” Leslie Weir, the librarian and archivist of Canada, told me.
In July, the Weston family (of Loblaws, Shoppers Drug Mart and Holt Renfrew) said that it would pay 12.5 million Canadian dollars for the ornate charter and donate it to the Canadian Museum of History. The family said that it would also give the museum 1 million dollars to pay for consultations with Indigenous groups on how to display the document, in which a British king gave away their land to a private company, and for other programs related to it.
The Westons’ only condition was that the court remove the charter from a general auction of the company’s artwork and approve the sale.
Then came a twist. Last week, David Thomson, the chairman of Thomson Reuters, asked the court to reject the Weston family’s request and continue with the auction. He said that he was prepared to make an opening bid of 15 million Canadian dollars and, if he won, to give the charter to the Archives of Manitoba in Winnipeg, the home of the Hudson’s Bay Company Archives. He would also donate 2 million dollars to the archive for the charter’s preservation, consultations and traveling exhibitions.
Mr. Thomson is, in effect, proposing to buy back the charter. Kenneth Thomson, his father, took control of Hudson’s Bay in 1979, in a deal that included the document. David Thomson worked in several roles at the company, among them store manager. (The Thomson family sold the last of its interest in the company in 1997.)
A court hearing is scheduled for Sept. 9, at the Westons’ request. But unlike Ms. Liu’s lease hearing, it is unlikely to be contentious.
In a statement, the Weston family’s investment company told me on Friday that “given the Thomson family’s long history with H.B.C. and Manitoba, their offer is entirely fitting and we’re pleased that they have stepped up.”
Trans Canada
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During a visit to Kyiv on Ukraine’s Independence Day, Prime Minister Mark Carney said that in September the country would receive military aid worth 1 billion Canadian dollars, from 2 billion Canada pledged in June. It will include drones, ammunition and armored vehicles.
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Olivia Ferney, a travel adviser originally from Dundas, Ontario, “may be the living embodiment of the axiom that the customer is always right,” Guy Trebay writes.
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Andrew James talks about how he used an app to create the initial design of his house in Toronto and then acted as his own contractor, in an article about four people who took on the daunting task of building their own homes.
Ian Austen reports on Canada for The Times. A Windsor, Ontario, native now based in Ottawa, he has reported on the country for two decades. He can be reached at [email protected].
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Ian Austen reports on Canada for The Times. A Windsor, Ontario, native now based in Ottawa, he has reported on the country for two decades. He can be reached at [email protected].
The post Why Three Wealthy Bidders Are Fighting for What’s Left of Hudson’s Bay appeared first on New York Times.
