Two of Canada's richest families have cleared the final hurdle to purchasing and donating the royal charter that created Hudson's Bay Co.
Ontario Superior Court Justice Peter Osborne on Thursday allowed the shuttered retailer to sell a 355-year-old document to holding companies owned by the Thomson and Weston families for $18 million.
The families plan to immediately and permanently donate the charter to the Manitoba Archives, the Manitoba Museum, the Canadian Museum of History in Gatineau, Quebec, and the Royal Ontario Museum.
Each of the organizations had already agreed to accept a charter issued by King Charles II on May 2, 1670, allowing for the creation of the HBC, which was then involved in the fur trade.
The five-page parchment document was critical to the country because it gave the HBC control of one-third of modern Canada at the time of its colonization, centuries before Confederation.
It was put up for auction because Hudson's Bay filed for protection from creditors in March and has since closed all of its stores; The defunct company has sold off its treasure trove of 4,400 works of art and artifacts to recoup money owed.
On Thursday, Osborne approved extending HBC's creditor protection period until March 31.
The Thomsons, who made their money in the media business, and the Westons, giants in the grocery and retail world, were the only bidders in the charter auction, but the court had to approve their joint purchase before it could take place.
The court's approval of the charter sale ends a saga that has occupied HBC's lawyers and financial advisers for months.
They initially planned to auction the document before Weston firm Wittington Investments Ltd. made an offer for $12.5 million to buy the charter and donate it to the Canadian Museum of History, a Crown corporation.
HBC was ready to accept Weston's offer, but then David Thomson's firm DKRT Family Corp. said it was waiting for the auction to make its starting bid of $15 million. He wanted the charter to belong to the Manitoba Archives.
HBC decided to return to auction plan and allowed Thomson to make the initial bid until both families combined to make an $18 million bid.
Reflect Advisors, HBC's financial advisors, approached 150 people or companies to see if they would beat the offer. HBC said no one agreed, leaving Thomson and Weston's proposal as the effective winner.
“Reflect did everything it could to try to set up a competitive auction, but when we finally got to that point, in light of the joint bid and the increased purchase price, no one else wanted to participate,” HBC lawyer Ashley Taylor said in court Thursday.
Still, “we remain, I think, in a very good position,” he said.
Assad Moten, a lawyer for the Attorney General of Canada, agreed, saying Thomson and Weston's plan was beneficial because it kept the statute in Canada and ensured it was available to the public.
According to Moten, the charter had been kept in a secure box in a warehouse since the creditor protection case began, and before that it was in a private office.
Before it is moved anywhere, the Canadian Institute of Conservation will examine it to assess its condition and advise on next steps, Moten said.
The Thomsons and Westons said the four institutions to which they would transfer the charter would be appointed “custodians” and would share the document equally. However, the families would like to see the charter first displayed in Winnipeg, where HBC opened its first department store in 1881.
Exactly how the charter will be distributed will be decided through a consultation process requested by Thomson and Weston with Indigenous groups, museums, universities, archives, subject matter experts and the public.
However, the term sheet, which was filed with the Ontario Superior Court of Justice and signed by donors and recipients, offers a number of possibilities.
Among them is an agreement under which each institution receives a charter for “alternating multi-year periods on a mutually agreed upon schedule.”
The document says other organizations not named as custodians may exhibit the charter and unidentified “related artifacts” as part of the national tour.
If the charter is not on display at any of the four custodial institutions, the protocol states that custodian organizations may be able to display high-quality copies of the artifact.
The terms also call for the creation of a website to display the charter and digital images of other artifacts and documents, as well as periodic symposiums to educate people about the charter “and its significance to the nation, Canadian history and Indigenous peoples throughout the centuries.”
The Thomsons and Westons agreed to donate $5 million to fund these efforts and to preserve and disseminate the Charter to the public.
The Desmarais family and Power Corp. have also promised future support. from Canada, as well as the Hennick Family Foundation.
The Desmarais family is behind Power Corp., which owns a majority stake in insurer GreatWest Lifeco and IGM Financial. The Hennick family founded the real estate firm Colliers International.
