5 hours Ago By Naimul Karim
HBC stills has the ability to stop liquidating any of its stores You can save this article by registering for free here . Or sign-in if you have an account. Hudson’s Bay Co.
is planning to begin liquidating six of its stores that it had previously hoped to keep open, signalling the potential end of Canada’s oldest department store. Subscribe now to read the latest news in your city and across Canada. Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience. Create an account or sign in to continue with your reading experience. Sign In or Create an Account HBC started liquidating 90 of its 96 stores last month, but it hoped to attract bids to keep its footprint alive through a “six-store model.
” But the move seems to be negatively impacting the company’s ongoing efforts to raise roughly $1 billion it needs to pay back creditors, according to court documents. “It is unlikely to receive a viable going concern bid based on the proposed Six Store Model,” Adam Zalev, cofounder of Reflect Advisors LLC, HBC’s financial adviser, said in the document. “The exclusion of the six stores from the liquidation sale is negatively impacting (HBC’s) realization efforts.
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Given the “low probability of receiving a viable bid,” the company said it wants to start liquidating the remaining stores, which includes its flagship store in downtown Toronto, as well as two others in the Greater Toronto Area and three in the Greater Montreal Area. HBC will still have the ability to stop liquidating these stores or any of its other stores if it receives a viable bid, Zalev said. However, any bid needs to be received by April 30, according to a court order.
HBC’s latest proposal comes almost a month and a half after it decided to seek protection from its creditors through the Companies’ Creditors Arrangement Act (CCAA). The company on March 14 said it would have to liquidate all 96 of its stores unless “an alternative solution” emerged. After a series of negotiations between its lenders and landlords, HBC received a court order on March 21 that directed it to liquidate all but six of its stores.
But HBC’s lawyer told the Ontario court on the same day that he wanted “to be crystal clear” that HBC did not have an agreement on which it could base a restructuring plan. Judge Peter Osborne, who has been hearing the motions at the Ontario Superior Court of Justice in Toronto since March 7, said the more stores “carved out” from liquidation, the better. “There’s no alternative but to approve the liquidation effective immediately to maximize the chances of success,” he said on March 21.
HBC will be returning to the same court on Thursday to get its proposal to sell its artifacts through a separate auction approved. It wants to host a separate auction to sell more than 1,700 pieces of art and more than 2,700 artifacts that “reflect the rich heritage and cultural legacy of the company.” Among them is the Royal Charter, a document that gave the company exclusive trading rights over a portion of Canada in 1670.
The company has received letters from various groups that have expressed concerns about “protecting” pieces of the collection, Zalev said in the document. These include letters from the Canada Advisory Committee for Memory of the World, which advises the Canadian commission for UNESCO. It requested HBC transfer the Royal Charter to a public archival institution to “ensure that this internationally significant, unique and irreplaceable document is not placed at risk,” Zalev said.
The company also received a letter from the Department of Canadian Heritage reminding HBC about the necessary cultural property export permit if the item is exported from Canada. The government agency also reminded HBC that “donations of cultural property to designated heritage institutions may receive an enhanced tax benefit if the donation is deemed to be of ‘outstanding significance to Canada.” In addition, HBC also received a letter from the Assembly of Manitoba Chiefs asking it to halt the auction due to the “profound cultural, spiritual and historical significance” of the art collection to First Nations.
The group wants HBC to commit to a “First Nations-led review process” and publicly reveal the full catalogue of items up for auction. The auctioneer selected “will engage with all parties that express an interest in the art collection to identify pieces of historical or cultural significance and formulate appropriate terms,” Zalev said. Some historians and analysts are concerned that Canadian organizations may not be able to afford these culturally significant artifacts and that they may end up going abroad.
“(The Royal Charter) is an object of national significance, so it would be nice if it could be acquired by a public collection,” Carl Benn, a history professor at Toronto Metropolitan University who previously worked at museums for more than three decades, said last week. “Although the cost might be prohibitive.” He said a big issue in Canada is that most public museums and archives don’t have enough money to go after the things they should be going after.
“It would be best if (HBC) actually just donated the charter to Library Archives Canada,” he said. “But I can understand how the legalities and the context of the company going bankrupt are leading it to send something to auction.” • Email: nkarim@postmedia.
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