Hudson’s Bay asked an Ontario court Wednesday to approve a restructuring agreement that will give it a few extra days timeline to save the six stores it has so far spared from liquidation.
A new version of the agreement will force the retailer to start liquidating those stores on April 8 — if it hasn’t found a likely transaction by then to repay some of what it owes its senior secured lenders, Bank of America, Pathlight Capital and Restore Capital — just three days after the deadline it originally asked for.
Ashley Taylor, a lawyer for Hudson’s Bay, told Ontario Superior Court Judge Peter Osborne the agreement wasn’t “a very satisfying outcome.”
It wasn’t exactly what the department store wanted either, he reasoned, but was the best arrangement it could find.
“The company wanted more stores. The company wanted more time. The company wanted more latitude,” Taylor said.
Hudson’s Bay’s request for approval on the restructuring agreement comes as the bulk of its 80 stores, 13 Saks Off Fifth locations and three Saks Fifth Avenue shops entered liquidation sales this week.
Last week, strong sales allowed the company to temporarily save its Toronto flagship location on Yonge Street, a store in the city’s Yorkdale mall and another at Hillcrest Mall in Richmond Hill, Ont. The remaining three survivors are located in the downtown Montreal area, Carrefour Laval mall and Pointe-Claire, Que.
The liquidation happening at the remainder of Hudson’s Bay’s stores is part of a creditor protection case the company began in early March, when it said it was facing financial difficulties that were so significant they threatened the company’s ability to continue operating.
Shoppers are scrambling to collect Hudson’s Bay memorabilia after the company won approval to start liquidation sales at all but six stores next week. The flagship store in downtown Toronto is among the survivors.
Some parties involved in the court proceedings are opposing Hudson’s Bay request to approve the restructuring support agreement.
One of those parties is RioCan Real Estate Investment Trust, which has a joint venture with Hudson’s Bay that sees them own or co-own 12 properties together.
A motion it has filed argues the proposed restructuring agreement’s early April deadline is at odds with another process the court approved Friday to facilitate a search for potential investors or buyers for portions of the business.
That exercise, known as the sale and investment solicitation process, asks potential buyers interested in owning some of the company to place bids by April 30, a motion filed by RioCan lawyers Robert Chadwick, Joseph Pasquariello and Andrew Harmes says.
Because the timelines “conflict,” the lawyers say approval of the restructuring agreement would “limit any chance HBC has” of finding a way forward.
“HBC and its stakeholders deserve the benefit of the opportunity to explore all reasonable opportunities to find a restructuring solution that maximizes value compared to a forced liquidation,” the RioCan lawyers say.
