A Hudson’s Bay sign is seen in Toronto’s financial district (Photo credit: Andrew Lahodynskyj, The Canadian Press)
A high-stakes legal fight is brewing around Hudson's Bay as one of its key lenders, Restore Capital LLC, challenges the retailer’s recent lease deal with billionaire Ruby Liu. The lender claims the company has poorly handled its asset liquidation and is demanding tighter court oversight to prevent further losses.
Restore Capital, a long-term financier of Hudson’s Bay, says the retailer’s decision to sell up to 25 store leases to Liu was hasty, poorly executed, and lacks a clear benefit for stakeholders. They’re now urging a court to block the transaction and appoint a "super monitor" to oversee the company's final financial steps.
Restore’s legal filing accuses Hudson's Bay of wasting time and money, saying the liquidation of assets has been disorganized. This includes hefty rent payments and high legal fees spent negotiating with landlords who have largely rejected Liu as a potential tenant. These landlords—among them real estate giants like Oxford Properties and Cadillac Fairview—have raised concerns about Liu’s lack of a practical business plan to revive department store locations.
So far, one deal involving three leases in British Columbia was approved last month for $6 million. But the larger, more controversial agreement covering 25 additional locations across B.C., Alberta, and Ontario still awaits court approval. Restore argues that in trying to win landlords over, Hudson's Bay racked up $7.5 million in rent and around $8.5 million in professional fees—all without making meaningful progress.
According to Restore, these efforts have drained funds that should have gone toward recovering its loan. They claim the retailer paid for unnecessary things, like removing signs and keeping stores open longer than needed, costing an extra $18 million. Restore says these expenses could have gone toward paying back creditors but were instead used unproductively.
Despite all this, Ruby Liu remains confident. She believes that if the court greenlights the deal, she can convince landlords to support her plans. Hudson’s Bay has yet to comment on the details of the motion but says it will respond soon. A spokesperson mentioned that the company continues to wind down operations responsibly while trying to protect the interests of everyone involved.
Still, Restore isn’t convinced. The lender says Hudson’s Bay delayed closing stores and failed to sell off leases nobody wanted. This mismanagement, they argue, has left lenders shouldering losses that keep growing.
To avoid more damage, Restore wants the court to give more power to Alvarez & Marsal—the firm currently overseeing the creditor protection process. If not, they suggest bringing in Richter Consulting Inc. as a new receiver to take control of the remaining steps.
As Hudson’s Bay’s future hangs in the balance, this legal tug-of-war could shape how much money—if any—its longtime lenders can recover.
