As most Hudson’s Bay stores entered liquidation this week, company stakeholders returned to court Wednesday to hash out how the retailer should proceed with a last-ditch restructuring plan to save six of its stores.
The Ontario Superior Court last week approved the beleaguered company’s proposal to liquidate all but six of its stores while searching for a restructuring solution.
But time is also running out for the retailer’s six stores as well.
The proposed restructuring support agreement that Hudson’s Bay struck with its senior secured lenders — Bank of America, Pathlight Capital, and Restore Capital — requires the company to begin liquidation sales at the six stores if a restructuring plan was not in place by April 7, a three-day extension from the original deadline.
“Be honest, it was not a very satisfying outcome for the company,” said Ashley Taylor, a lawyer for Hudson’s Bay. “Two weeks is not a lot of time to find what is required to fit the definition of a permitted restructuring transaction.”
Taylor said this is “the best” Hudson’s Bay could negotiate with its senior lenders because the company is using the lenders’ collateral to fund its restructuring attempts, and a shortfall is already expected in paying down the debt at the end of the liquidation sale.
On June 13, two days before the liquidation sale is due to finish, cash-flow projections predict Hudson’s Bay would have $156 million in cash on hand after expenses, far less than its $257 million in senior secured debt.
Nearly an hour into the hearing, about four or five windows showing sexually explicit videos appeared on the courtroom Zoom call and stayed up for about 15 seconds, shocking those present.
“Shut up immediately,” said Ontario Superior Court Justice Peter Osborne. He then asked the clerk to reopen the Zoom link and admit only those who could be identified as parties in this proceeding.
