An Ontario court has delivered a ruling in the Hudson’s Bay creditor protection proceedings, denying the company’s request to appoint a law firm of its choosing to represent more than 9,000 current and former employees and retirees. At the same time, the court approved the retailer’s controversial move to auction off its extensive historical art and artifact collection.
Hudson’s Bay had asked the court to appoint Toronto-based Ursel Phillips Fellows Hopkinson LLP as representative legal counsel for affected staff. The firm was selected from a pool of five contenders who submitted proposals to represent workers amid the company’s restructuring under the Companies’ Creditors Arrangement Act (CCAA).
However, the court sided with concerns raised by Andrew Hatnay of Koskie Minsky LLP, a firm already representing over 400 Hudson’s Bay workers. Hatnay argued that allowing the retailer to select legal representation for workers poised to take action against it posed a clear conflict of interest.
“This process is fundamentally flawed,” said Hatnay, suggesting that an independent third party should be tasked with selecting legal counsel to ensure a fair and unbiased process. Hatnay also emphasized that Koskie Minsky was the only firm to appear in court across five prior hearings on behalf of employees and retirees.
Gowling WLG, representing six former Hudson’s Bay executives in the Supplemental Executive Retirement Plan—wound down earlier this year—backed Hatnay’s proposal to appoint a retired judge to oversee the decision.
Justice Peter J. Osborne agreed with the general concern but opted to appoint retired Justice Herman J. Wilton-Siegel to assess submissions and ultimately choose a representative counsel. “I am not prepared today to appoint a specific firm as representative counsel,” Osborne stated. “However, I agree that one representative counsel can adequately represent the interests of all current and former employees.”
Art Collection Auction Approved Amid Public Outcry
The court also gave Hudson’s Bay the green light to auction its expansive art collection—comprising more than 1,700 works of art and over 2,700 historical artifacts. The sale will be managed by Heffel Gallery.
Among the most significant items is a royal charter granted by King Charles II in 1670, which laid the foundation for the Hudson’s Bay Company’s fur-trading empire and colonial dominion over much of what would become Canada.
Despite approval, Justice Osborne instructed Hudson’s Bay to consult with government and Indigenous stakeholders before proceeding. “The company must return to court with a detailed auction protocol after engaging in meaningful consultations with concerned parties,” Osborne said.
Multiple stakeholders have expressed alarm over the potential sale of culturally sensitive items. Kyra Wilson, Grand Chief of the Assembly of Manitoba Chiefs, issued a formal objection, calling for the suspension of any sale involving artifacts tied to First Nations history.
In response, Hudson’s Bay’s legal team assured the court that no sales would occur until those consultations are complete. “Nothing will be sold or transferred before those discussions and consultations take place,” said Maria Konyukhova, counsel for Hudson’s Bay.
The court-appointed monitor, Alvarez & Marsal Canada, has agreed to circulate a catalogue of the collection to all interested parties ahead of any auction.
Retail Liquidation Now to Include All Stores
Wednesday marked another blow for the storied retailer as its financial advisor, Reflect Advisors, confirmed that all of Hudson’s Bay’s remaining stores—including the six initially excluded—will now enter liquidation.
The revised strategy marks a significant departure from earlier restructuring efforts, with the company conceding that a viable plan to continue operations is unlikely to materialize.
“The exclusion of the six stores from the liquidation sale is negatively impacting the applicants’ realization efforts,” said Adam Zalev, managing director at Reflect Advisors. He noted that few credible bids had been submitted under the six-store restructuring model, leading to a broader wind-down.
Hudson’s Bay has stated that if credible bids are received before the April 30 deadline, it reserves the right to remove individual locations from the liquidation process. Bids are being accepted for both retail stores and intellectual property, including the iconic Hudson’s Bay name and related trademarks.
Interest from Prospective Buyers Emerges
Despite the grim outlook, some expressions of interest have surfaced. As of April 23, 18 parties have submitted letters of intent to lease or purchase 65 of Hudson’s Bay’s retail locations. However, 36 store leases have yet to attract any attention.
One high-profile potential bidder is Weihong Liu, a British Columbia-based billionaire who owns several shopping centres across Canada. On Chinese social media, Liu reportedly announced plans to acquire “dozens” of Hudson’s Bay stores, though it remains unclear whether a formal bid will be submitted by the end-of-month deadline. On RedNote this week, Ms. Liu, speaking in Chinese, was discussing 10-year terms for the stores that she is hoping to acquire.
Other bidders are said to have come forward, including rumours of a financially-backed bid involving former HBC President Bonnie Brooks, a potential bid from current owner Richard Baker (requiring an ‘insider protocol’), and another group from Asia that is also said to have potentially expressed interest ahead of the application deadline.
Uncertain Future for Canada’s Oldest Company
With liquidation sales commencing on Friday, April 25 in the remaining six stores, the retailer’s path forward remains precarious. Once Canada’s pre-eminent department store chain and the oldest incorporated company in North America, Hudson’s Bay now finds itself in a struggle for survival.
The firm is racing against time to extract as much value as possible from its real estate, intellectual property, and historical holdings before its court-mandated sale and wind-down deadlines expire. And there’s still hope that a buyer could save the business, though there’s less hope than before. A Wednesday affidavit from Adam Zalev, Managing Director of Reflect Advisors and the financial advisor to Hudson’s Bay Company, indicated that no viable bidder had stepped forward.
