Restore Capital, an agent representing some of Hudson’s Bay‘s senior lenders, is asking an Ontario court to terminate the retailer’s “uneconomical and imprudent transaction” with B.C. billionaire Weihong Liu, whose company is bidding on up to 25 leases, according to court documents.
Restore, a financial services company, which was owed $136 million as of March 7, said in a court filing on Tuesday afternoon that Hudson’s Bay has incurred “exorbitant rent costs and professional fees” in trying to obtain landlord consents for Central Walk’s plan to purchase 25 store leases.
Hudson’s Bay has not brought any motion in court to complete Liu’s bid for more than a month, Restore pointed out.
Liu, the chairwoman of shopping mall owner Central Walk, signed a purchase agreement with the beleaguered Canadian retail icon for 28 leases in three provinces on May 23 but has only successfully won bids on three of them. Those three are located in shopping malls that she owns in B.C.
Landlords for at least 23 of the other 25 leases have objected to her purchase plans, citing concerns over the lack of a “meaningful business plan.”
Restore said the mismanagement of Hudson’s Bay is “seriously prejudicial” to the lenders’ interests and has caused a projected shortfall for the lenders it represents to $73 million from $43 million between May 9 and June 17, 2025.
“The failure of HBC to adequately consider and respect the interests of secured creditors in a way that has resulted in preventable losses to the tune of tens of millions of dollars will likely continue to have knock-on effects for stakeholders,” said Restore CEO Ian S. Fredericks in the court document.
Tiffany Bourré, the spokesperson of Hudson’s Bay, said in an email to the Star that the retailer “continues to manage the monetization of its assets and the windup of its affairs in a responsible and diligent manner, appropriately balancing the interests of various stakeholders.”
The company will fully respond in due course, she added.
Restore will bring a motion to the Superior Court of Justice on July 15, asking the court to direct Hudson’s Bay to terminate its agreement with Liu and “immediately disclaim” all remaining leases subject to the Central Walk purchase agreement. It also asks the company to distribute $6 million to Restore.
Restore is one of four secured lenders waiting to claim recoveries from inventory liquidation proceeds and the sale of Hudson’s Bay’s real estate assets and intellectual property.
Fredericks said Restore lenders have so far borne the entire costs of “failed negotiations” between Hudson’s Bay and its landlords over Liu’s offer, including approximately $2.5 million of rent for the affected leases through June 30, 2025.
He added that Hudson’s Bay, which closed its doors on June 1, will have spent more than $100 million more by Sept. 12 than it generated for creditors, based on the cash flow forecast.
“The current level of spending by HBC cannot be justified, and it is imperative that the costs of HBC’s wind down be more effectively managed,” by (the court-appointed monitor),” Fredericks said.
Restore is applying to the court to give the monitor, Alvarez & Marsal, that oversees Hudson’s Bay in the court proceedings, more power to manage the company’s business and protect creditor’s interests.
