A wealthy individual from British Columbia who had been engaged in a legal battle to acquire former Hudson’s Bay properties faced a setback as an Ontario Superior Court ruling favored the landlords of the bankrupt retailer, denying the tenancy to Ruby Liu.
Judge Peter Osborne expressed doubts about Liu’s capability to fulfill the lease conditions she sought, leading to the decision against her tenancy. Hudson’s Bay and Liu’s spokesperson refrained from immediate comments on the verdict, with the option to appeal remaining open for both parties.
The dispute centered on Liu’s attempt to purchase 25 former Hudson’s Bay leases for $69.1 million, a move opposed by major landlords like Cadillac Fairview, Oxford Properties, and Ivanhoé Cambridge. After extensive review of arguments from various commercial landlords and investors, Judge Osborne’s ruling was a lengthy process, concluding with the denial of Liu’s tenancy request.
Following the retailer’s financial struggles and subsequent liquidation of stores, Liu emerged as a prominent bidder aiming to establish a new department store chain under her name. Despite court approval for three leases linked to malls she already owned, objections from landlords intensified as they raised concerns over Liu’s lack of preparedness, questionable business plan, and inexperienced team.
Landlords contested Liu’s renovation timeline and doubted her budget’s adequacy, questioning her financial capability based on her malls’ debt history. Liu defended her track record in Chinese real estate and ownership of successful malls in Canada, attributing landlord resistance to her outsider status.
The Bay and Pathlight Capital suggested that landlords opposed Liu’s bid to regain control of their properties for potential higher rents and tenant selections. The legal battle also involved considerations of the Companies’ Creditors Arrangement Act, which mandates the court to assess the suitability of a potential tenant based on their ability to fulfill lease obligations and monitor support.
While the court-appointed monitor expressed confidence in Liu’s financial capacity, concerns were raised about her preparedness for the substantial task ahead. The ruling marked a significant development in the ongoing legal tussle over the acquisition of Hudson’s Bay leases by Ruby Liu.
