A recent court filing reveals that Hudson's Bay Company (HBC) has threatened to terminate a lease agreement with Ruby Liu, a billionaire from British Columbia. Liu has made two direct appeals to Ontario Superior Court Judge Peter Osborne, attempting to convince him to view her case favorably, despite being advised against such communications by the retailer.
In a comprehensive 50-page submission sent to Judge Osborne, dated July 10, Liu argues that her significant investment agreement to acquire 25 leases associated with the now-defunct retailer and its Saks Canada divisions is at serious risk. She stated, “HBC has repeatedly threatened to terminate our agreement and forfeit our deposit,” indicating the precarious nature of her deal.
Neither Liu nor HBC responded promptly to inquiries regarding the new court filings. Liu, who possesses three malls in B.C. and a golf course, initially entered into two agreements to acquire Bay leases in May, shortly after HBC filed for creditor protection amid significant debt totaling $1.1 billion. The first deal, valued at $6 million, included three leases in Liu’s owned malls and was approved by the court in the previous month.
The second agreement involves 25 additional leases, with 15 of these situated in Ontario in prominent locations such as Fairview Mall, Sherway Garden, Bayshore Shopping Centre, and Bramalea City Centre. The other 10 are divided equally between Alberta and B.C., including major retail centers like West Edmonton Mall, CF Market Mall, and Guildford Town Centre. This second deal also includes a sizeable deposit of $9.4 million, which suggests a total purchase price of $94 million, although it has not yet been submitted for court approval.
Judge Osborne has set a deadline for HBC to file a motion seeking court approval for this second agreement. However, the deal faces strong opposition from landlords who claim that Liu has not provided adequate information about her intentions for utilizing their properties, thus leading to concerns about her plans.
Liu expressed her ambition to establish a self-branded department store, integrating retail, dining, entertainment, and recreational facilities if she secures the leases. The newly submitted documents to the court, some of which were redacted, also contained two letters Liu sent directly to Judge Osborne, prompting the chief justice's office to remind her that direct communications with judges in ongoing cases are unacceptable. They cautioned that any additional correspondence could be construed as harassment.
In one of her letters, Liu disclosed her background in China and her migration to Canada, expressing her capabilities and requesting a chance to prove herself, stating, “Through transformation, I will create brilliance again.” In her follow-up communication, she urged the judge to “uphold justice” and included correspondence from HBC’s lawyers reminding her of impending deadlines to take necessary actions or risk losing her agreements.
According to these letters, HBC detailed various conditions, including hiring the retailer’s former CEO, Liz Rodbell, and financial consulting firm KPMG, while also requiring Liu to re-engage her previous legal representation, Miller Thomson. HBC even proposed to reduce the lease price by $3 million if Liu utilized those funds for the requisite consultation and legal retainers.
The legal documents indicate that HBC’s lawyers have criticized Liu for her “continuous failure” to reasonably obtain landlord approvals during discussions with various property owners. They claimed Liu neglected constructive recommendations, did not prepare significant materials for landlord meetings, and failed to provide satisfactory responses regarding her business capacity, financial plans, and supplier details.
Additionally, a document provided by Liu in June, which was reviewed by the Canadian Press, indicated her aspirations to open up to 20 stores within 180 days of securing her leases. It outlined a broad financial framework and mentioned efforts in hiring and supplier negotiations, though specifics about vendors were absent.
Landlords such as Cadillac Fairview, Oxford Properties, and Primaris expressed their dissatisfaction in court last month, indicating that their interactions with Liu had been “very troubling” with few productive discussions and a lack of meaningful information.
