An Ontario Superior Court judge has deferred his decision to Friday on Hudson’s Bay’s proposal to liquidate all of its 96 stores after failing to secure additional financing.
At a court hearing Wednesday, the beleaguered Canadian retailer asked for an extension of creditor protection until Friday to allow the company to negotiate further with various relevant parties, such as landlords, lenders, suppliers and employee groups, a request Justice Peter J. Osborne granted.
Hudson’s Bay counsel Ashley Taylor told court there have been “good, constructive discussions” between different stakeholders since a contentious hearing earlier this week.
“There are a lot of different stakeholders with varied interests, and we’re trying to balance them and bring everybody together,” Taylor said.
Justice Osborne approved the retailer’s request for an extension and ordered the hearing to resume at 10 a.m. Friday at the Toronto Courthouse.
However, he said he is open to holding the hearing on Thursday if the company is ready.
“I do think that’s to the benefit of all stakeholders, and it minimizes the conflict, but it also minimizes the costs, and therefore maximizes the potential for recoveries if we’re able to do that,” Justice Osborne said.
Taylor said the company would continue to seek approval for the same proposals it had previously made, including liquidating the entire business, selling or reassigning leases with landlords and launching a sales process to seek last-minute buyers and investors.
Andrew Hatnay, a lawyer representing some Hudson’s Bay employees and retirees, told the court Wednesday he was disappointed to hear the same proposals were still on the table and re-emphasized that more than 9,000 workers employed by Hudson’s Bay and its banner retailers could face layoffs if the company goes into the liquidation phase.
“This type of job loss will be a disaster,” said Hatnay.
Court documents show that as of Jan. 1, the company had about $3 million in cash on hand, $1.13 billion in secured debt, and owed its nearly 1,900 unsecured creditors — such as brands, governments and landlords — about $520 million.
Taylor told court all employees continue to be paid, retail locations are open, and all landlords are being paid — with the exception of RioCan-Hudson’s Bay JV, a joint venture the company has with RioCan Real Estate Investment Trust.
The rent owed to the joint venture was one of the key issues discussed at an earlier court hearing Monday.
The company said its cash flow forecast does not support the full amount of rent owed to RioCan-Hudson’s Bay JV, but the joint venture insisted the rent be paid as soon as possible.
