Hudson’s Bay is still waiting to see if it will be granted approval to liquidate stores as the retailer requests more time to work out some of its differences with its myriad of landlords, lenders and other partners.
The department store giant was in court Wednesday, where its lawyers asked for up to two more days to resolve contested issues. During prior hearings, halting rent payments to RioCan Real Estate Investment Trust, which it holds property with through a joint venture, and other vendors were disputed.
Ashley Taylor, a lawyer representing Hudson’s Bay, told Ontario Superior Court judge Peter Osborne, “we have had good, constructive discussions,” but asked for more time to keep that dialogue going.
In the best-case scenario, Taylor expected the discussions will have netted enough consensus by Thursday, but he asked the judge to give the parties until Friday, if they need it.
The discussions are holding up the liquidation Hudson’s Bay had hoped to start this week at all 80 of its stores, as well as three Saks Fifth Avenue stores and 13 Saks Off 5th locations in Canada. The company filed for creditor protection on March 7.
Despite requesting permission from the court to move forward with the liquidation, the company is holding out hopes it can avoid the merchandise sell-off by finding enough financing to keep it alive in some form.
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The $23 million it has garnered so far is not enough and necessitates a full liquidation of the business, putting 9,364 jobs at risk, lawyers for Canada’s oldest company have said.
Hudson’s Bay’s fortunes do not appear to have turned yet. When the company returns to court in the coming days, Taylor said he still expects to be asking for permission for Hudson’s Bay to carry out a full liquidation, but he said the business isn’t giving up.
“I can assure the court that management is doing everything they can in an effort to find a restructuring solution here,” Taylor said.
Osborne granted Hudson’s Bay the additional time Taylor asked for, saying it “minimizes the conflict but also the cost and maximizes the chance of recovery.”
Before granting the added time, he sought assurances from Taylor that the company had the ability to keep operating until Friday with locations open and goods being shipped from the distribution centre to stores.
Taylor told him, “It’s business as usual.”
The hearing marked Hudson’s Bay’s second appearance before the court this week.
The Monday hearing, where the company first asked for liquidation permission, featured requests from lawyers representing everyone from employees, landlords and lenders to companies whose jewelry is sold in the Bay or who fix the stores’ escalators.
Some argued their clients had not been provided enough time to consider other avenues to help the business or recover what they are owed. A few also opposed the company’s request to cease paying rent to landlords.
By the time Monday’s hearing wrapped, Osborne said in a Tuesday endorsement that it was clear to him “there were many issues about which there was vigorous disagreement.”
Because Hudson’s Bay’s situation was evolving so quickly, Osborne felt “numerous parties had not had time to fully digest the relevant events,” nor the “complex and voluminous motion materials” before the court.
However, he observed that many of the parties were prepared “to engage in good faith discussions to see if at least some of the issues could not be narrowed or resolved.”
Osborne asked all the sides to lower the “temperature” of their discussions and return to court later in the week with an update on their progress.
