attempts to sell 25 of its rental properties to a British Columbia billionaire
About $69 million was blocked by an Ontario court, according to court filings.
HBC signed a deal to sell its rental properties to Liu in May, but the agreement was met with resistance from several retail landlords, including Ivanhoé Cambridge Inc. And
which questioned her business plan and ability to operate the stores, and the case went to trial in late August.
Almost two months later Judge Peter Osborne
agreed with some of the concerns raised by landlords.
“The overall lack of experience at the management level poses a significant risk to the operational viability of opening and operating 25 large department stores within the expected time frame,” he said in his 48-page decision released Friday. “The composition of the proposed senior management team of the buyer… gives me grave concern.”
HBC, Canada's oldest retailer, which filed for bankruptcy protection under the Companies' Creditors Arrangement Act in March, is struggling to pay millions of dollars to its creditors.
In addition to monetizing the leases, HBC also laid off all of its employees and sold its intellectual property rights
and is still trying to auction off his artifacts.
The sale of Liu's 25 leases could have resulted in the recovery of more than $50 million for HBC's creditors and the creation of about 1,800 jobs across Canada, according to a court document filed by HBC.
HBC has not responded to the Ontario court's decision, but it is a blow to Liu, who had already organized several recruiting events in July to hire workers for her proposed stores.
Then Liu outlined her plans to create a new chain of stores under her name. The stores will devote about 30,000 square feet to a children's play area and will include Asian supermarkets and Asian-themed dining areas, she said.
She also wanted to open seven to eight “platinum stores” that would focus on an “exciting shopping experience” to attract younger shoppers.
“In two to three years, you'll see more Ruby Liu stores in Canada,” she said at the time. “If we are successful, in five years we are going to visit other countries in North America and the rest of the world. If we are successful, we plan to build 30 stores around the world.”
Lawyers representing landlords said in August that her plan was “doomed to fail.”
One attorney told the court that it is far less detrimental to landlords and other mall tenants to have a vacant unit than to have an “inappropriate, unsuitable anchor tenant.”
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