Court approves Hudson’s Bay plan to auction its royal charter

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TORONTO – The royal charter that created Hudson Bay in 1670 is on its way to auction.

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Ontario Superior Court Justice Peter Osborne on Friday approved a process under which the deed, owned by a defunct retailer, will be sold early next month. The auction will begin with an $18 million bid from holding companies owned by two of Canada's richest families, the Westons and Thomsons.

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“We're all interested in seeing what happens,” Osborne said, deciding an auction was the best course of action to ensure the “profound” document “stays here and is part of our history.”

The charter, signed by King Charles II more than 350 years ago, not only created the HBC, but also gave the company control over one-third of modern Canada's territory, trade and relations with Indigenous peoples for decades to come.

The deed is being sold to help Hudson's Bay pay off the $1.1 billion in debt it had when it filed for protection from creditors and closed its stores earlier this year.

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HBC lawyer Ashley Taylor told the court on Friday there was “no better alternative” than an auction that would “provide maximum benefit to the applicant's creditors”.

Under the proposal approved by Osborne on Friday, anyone wishing to buy the charter would have to register their interest by Nov. 28 and agree to donate the document to a Canadian government agency that would share it with the public and Indigenous organizations.

The live auction, open to qualified bidders, will take place on December 3 at the Toronto offices of Stikeman Elliott, HBC's lawyers. The process will be overseen by Reflect Advisors, HBC's financial advisor, and any selected buyer will still be subject to court approval.

Family holding companies Thomson and Weston agreed to start bidding at $18 million. The Westons are best known for their ties to Loblaw Cos. Ltd., and the Thomsons are media barons with ties to technology firm Thomson Reuters Corp.

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If the families are able to purchase the document, they will donate it to the Manitoba Archives, the Manitoba Museum, the Canadian Museum of History and the Royal Ontario Museum.

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Although the charter would be owned equally by the four public custodians, Manitoba would be designated its home and chosen as the site of the first public exhibition following the donation.

Both families plan to give the organizations another $5 million to fund conservation, education and charter tours. The Desmarais family and Power Corp. from Canada and the Hennick Family Foundation also provided additional support.

Thomson and Weston's offer expires on December 31, requiring HBC to urgently auction the charter, Taylor said when Osborne asked him why the auction timeline was “quite tight”.

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The two-week window is “shorter than we initially expected, but we haven't been sitting idly by,” Taylor said.

He explained that HBC, Reflect and others have been generating interest for months among potential bidders they are aware of, and media coverage of the “various twists and turns” associated with the auction also means that anyone interested in putting forward an offer is likely aware of the impending sale.

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The unexpected turns of events he mentioned played out over several months of legal proceedings.

HBC initially planned to auction the document until holding company Weston Wittington Investments Ltd. did not offer $12.5 million to purchase the charter outright and donate it to the Canadian Museum of History, a Crown corporation in Gatineau, Quebec. The company also offered $1 million to preserve and distribute the charter.

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The offer convinced HBC to cancel the auction and prepare to sell the charter to the Westons until David Thomson and his family corporation DKRT emerged in August.

Thomson wanted the company to continue the auction and agreed to start the bidding at $15 million. If his company was successful in acquiring the license, he wanted to donate it to the Manitoba Archives, which already houses the largest collection of HBC artifacts and is where the company was based when it moved its headquarters from England. He planned to spend $2 million on charter tours and conservation.

After DKRT announced its intentions, Taylor said Friday that Whittington was not committing to participate in the auction. According to him, HBC asked for help several times, but never received a guarantee.

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However, the proposal from Thomson and DKRT prompted HBC to return to the auction plan. Then, at a September hearing meant to win approval for the sale, Hudson's Bay instead said it had received another unsolicited charter proposal. He declined to name the bidder and then asked for a delay.

The joint proposal between the Thomsons and the Westons was revealed as a mystery proposal in court papers filed last week.

In accepting the offer, Cody Grout, assistant professor of history and Indigenous studies at Western University in London, Ont., was glad Osborne weighed the impact on Indigenous people, who often view the HBC through the painful lens of their colonial past.

However, Groat said it was unfortunate that government agencies had to rely on wealthy families to protect history.

The Manitoba Museum, which owns 27,000 other HBC items, told The Canadian Press it does not have the money to purchase the charter, although it would welcome a donation.

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