TORONTO Restore Capital LLC, one of Hudson’s Bay’s major lenders, has expressed severe criticism regarding the retailer's liquidation process, urging a court to terminate a controversial lease transaction with B.C. billionaire Ruby Liu. The motion, filed on July 8, 2025, seeks to halt the retailer from selling up to 25 of its leases to Liu and calls for the appointment of a “super monitor” to oversee the liquidation of Hudson's Bay Company's (HBC) remaining assets.
Restore Capital argues that Hudson's Bay has “frittered away” its collateral and lacks a clear plan to benefit its stakeholders. The investment firm has a long history with the 355-year-old retailer, having lent it significant funds, including a recent $151 million tranche in December 2024, just before HBC filed for creditor protection.
Following its financial distress, Hudson's Bay eliminated all 80 of its retail locations alongside 16 additional stores under its Saks brand, while liquidating assets which include leases and intellectual property. Two lease agreements were brokered with Liu in May 2025, the first involving a $6 million transaction for three of her B.C. mall properties, which received court approval last month. The second deal, concerning up to 25 leases across Alberta, B.C., and Ontario, is currently pending court approval.
Landlords like Cadillac Fairview and Oxford Properties have largely opposed Liu's plans to become a tenant, citing the lack of a viable business plan for the department stores she intends to operate. Restore Capital has highlighted this landlord dissent in its motion, suggesting that Hudson's Bay's efforts to secure consents from landlords have been costly and ultimately fruitless.
The motion states that HBC has incurred significant costs while attempting to secure landlord approvals, estimating that it will accumulate $7.5 million in rent costs while pursuing the Liu deal. Furthermore, Restore notes that a considerable portion of projected professional fees, totaling $8.5 million over a seven-week period, are associated with the Liu transaction.
Ruby Liu has asserted that if the court approves the sale, she believes she can convince the landlords to support her, but Restore Capital warns that if HBC struggles to finalize a deal with Liu, both they and other lenders may see their collateral “irretrievably eroded.” Hudson's Bay spokesperson Tiffany Bourré stated that the company will respond to the motion at an appropriate time, emphasizing that they are managing the monetization of their assets responsibly while considering the interests of various stakeholders.
Restore Capital is concerned that Hudson's Bay has mismanaged its liquidation strategy. They argue that failures to timely disclaim unneeded leases, adequately close stores, and properly remove fixtures and equipment have led to burdensome costs. Specifically, they cite an additional $18 million in expenditures resulting from these missteps, which significantly dampen the prospects of asset recovery.
The lender fears that its only remaining avenue for recovering owed funds may involve the company's pension plan, which reportedly has a surplus but could face lengthy and complex entitlement disputes. Given these concerns, Restore seeks to empower Alvarez and Marsal, the current monitor guiding Hudson's Bay's creditor protection process, to facilitate a more effective wind-down of the company’s operations.
If a “super monitor” is not appointed as requested, Restore suggests the alternative course of appointing Richter Consulting Inc. as a receiver to manage the proceedings effectively. The ongoing situation underscores the complexities and difficulties faced by Hudson’s Bay Company as it navigates its liquidation and seeks solutions amidst considerable stakeholder dissent and financial pressures.