Hudson’s Bay is returning its former stores to landlords, effectively ending B.C. billionaire Ruby Liu’s fight to take over the collapsed retailer’s leases.
Franco Perugini, HBC’s senior vice-president of real estate and legal, said in a Monday email to The Canadian Press that the company is disclaiming the leases it had for 25 properties Liu tried to buy.
A disclaimer is a legal mechanism that ends a lease before it expires and thus, releases the tenant from obligations like paying rent or maintaining the property.
As long as no landlord objects to the disclaimer, Perugini says the HBC leases will be terminated Nov. 27.
Linda Qin, a spokesperson for Liu, did not immediately respond to a request for comment about the disclaimers.
HBC moved out of its 80 stores and 16 more under its Saks banners over the summer after filing for creditor protection and liquidating its merchandise.
When it put its leases up for sale, Liu stepped forward to buy up to 28. She hoped to use them to open a new department store named after herself.
B.C. billionaire Ruby Liu is hoping to expand her mall empire by taking over 28 former Hudson’s Bay retail space leases. She joined CBC’s Gloria Macarenko with a translator to share her vision for the department stores, in her first interview with English-language media in Canada.
HBC was on board with the plan. It speedily got court approval for her to purchase three in B.C. malls she owned — Woodgrove Centre, Mayfair Shopping Centre and Tsawwassen Mills.
The remaining 25 were hotly contested by landlords including Cadillac Fairview, Oxford Properties and Ivanhoé Cambridge. They didn’t want to accept Liu, who was offering $69.1 million for the leases, as a tenant because they argued her business plan was insufficient and she was too inexperienced.
Liu maintained she had what it would take to assume the leases and offered to pour millions into hiring, buying inventory and renovating to rehabilitate the sites.
HBC was insistent that the sale happen. After all, it has a lengthy list of creditors who were owed about $1.1 billion when its wind down began and Liu was one of their best shots at recovering some of that cash.
However, last month HBC lost its fight when a judge sided with the landlords. He said he had “significant concerns” about Liu’s ability to meet the terms of the leases she wanted.
Following the ruling, HBC did not say whether it would appeal the decision, but the lease disclaimer indicates it will not continue to fight for the sale.
Josh Burleton, a spokesperson for Oxford Properties, said Monday in an email that HBC’s decision to disclaim the leases “brings some certainty to this lengthy and costly process and allows us to move forward.”
Oxford’s focus during HBC’s wind down has always been on protecting its assets because they support employees and pensioners, he said.
Oxford is the real estate division of Ontario Municipal Employees Retirement System, which administers the pensions of more than 600,000 plan members.
