TORONTO – Hudson’s Bay landlords are asking the collapsed department store chain for about $2.4 million to cover expenses they incurred while fighting a plan to sell leases to a B.C. billionaire.
The landlords say the battle over whether Ruby Liu should have been able to move into their spaces resulted in “significant” expenses because they had to prepare extensive court records and participate in three days of cross-examinations.
In court filings, the landlords say they should be entitled to recoup those costs because they tried to save all the parties cash by proposing a settlement over the summer.
Had HBC accepted the settlement, landlords say it would have stopped a “wholly avoidable” fight over a deal with Liu it alleges the retailer knew was flawed. It forged forward in part to appease creditors like Pathlight Capital, the landlords say.
“At Pathlight’s insistence, the applicants (HBC) took a big swing and they missed,” the landlords writes in a court filing.
“They were entitled to try. But they are not entitled in the circumstances to make the opposing landlords bear the significant costs of successfully opposing their motion.”
HBC is pushing back on the request from landlords Cadillac Fairview, Oxford Properties, Ivanhoé Cambridge, Primaris Management, QuadReal Property, Morguard Investments and KingSett Capital.
The retailer says in its own court submission that awarding costs to the landlords would have a “chilling effect” on other creditor protection cases because it could make future debtors hesitant to try to sell their leases lest they be on the hook for similar fees.
HBC — once Canada’s oldest company — collapsed under the weight of debt last March and closed all of its stores just after its 355th birthday.
As the company was winding down, it announced a plan to sell 28 of its leases to Liu, who owns Woodgrove Centre, Mayfair Shopping Centre and Tsawwassen Mills in B.C.
A court allowed the transfer of three leases in malls Liu owned but never approved the sale of the remainder because landlords successfully argued Liu was an unfit tenant for their properties and had not provided a sufficient business plan.
HBC is arguing it can’t be faulted for pursuing a deal with Liu because the transaction would have generated more than $50 million in net proceeds and resulted in a “significant” paydown of their secured debt.
The defunct retailer says the landlords shouldn’t see their expenses covered. If a court did rule in the property owners’ favour, HBC argued any amount they get should be nominal.
HBC’s position is being backed by lender Pathlight, which pointed out in a court filing that landlords already received rent payments in the months leading up to and after the Liu deal went before a judge.
Pathlight says handing the landlords more money would “represent a significant windfall.”
It’s unclear which judge will rule on the matter. Judge Peter Osborne had been regularly hearing developments on the case until late December, when he was elevated to the Court of Appeal for Ontario.
The submissions from the landlords, HBC and Pathlight were filed in November and December.
They reveal that just before the Liu matter was headed to court, the landlords offered a settlement in hopes of saving everyone time.
The landlords say they would have accepted their leases back as of Sept. 15 and would agree to cover the cost of removing items from the stores such as fixtures, furniture and signage.
The landlords say HBC refused the offer and instead demanded a $29-million payment.
This report by The Canadian Press was first published Jan. 23, 2026.
