Hudson's Bay employees who lost jobs can apply for federal support, court rules
The court decision on Tuesday triggers an entitlement to federal benefits for the retailer's former staff. More than 8,300 Bay employees have now been terminated without severance pay.
The court hearing occurred just two days after Canada's oldest retailer completed its liquidation sales, closing its doors for the final time over the weekend.
'That's a milestone, albeit an unhappy one,' Ontario Superior Court Justice Peter Osborne said during Tuesday's hearing. While discussing the end of the Bay's liquidation, he remarked, 'The end of an era.'
Lawyers appointed to represent the Hudson's Bay employees are now in discussions with Service Canada to develop a timeline for employees to access those federal benefits.
'We know they want it as soon as possible,' Susan Ursel of Ursel Phillips Fellows Hopkinson LLP said at the hearing.
Also on Tuesday, the court approved a motion from RioCan Real Estate Investment Trust to place a joint venture it co-owns with Hudson's Bay into receivership.
The joint venture gives RioCan a stake in 12 properties where Bay stores were located, including buildings in downtown Montreal, Vancouver, Calgary and Ottawa, and locations in high-profile malls such as Yorkdale and Scarborough Town Centre in Toronto.
FTI Consulting Canada Inc. will act as receiver for the companies that fall under the joint venture.
A third matter before the court on Tuesday was an application to approve Canadian Tire Corp.'s $30-million deal to acquire Hudson's Bay's intellectual property. That approval is needed to transfer ownership of a trove of the historic retailer's brand names, logos, and stripe design dating back to the point blankets used in the fur trade in the 18th century.
Justice Osborne stood down that matter on Tuesday, saying that he wanted to consider some specific matters related to the deal. In particular, he questioned lawyers for Hudson's Bay about the inclusion of the trademark for the company's 1670 Royal Charter.
The charter itself is part of a separate auction of the Hudson's Bay art and artifacts collection, which has yet to occur. The process for that auction is still in development.
It is important that the deal does not allow Canadian Tire to prevent others from calling the document 'the royal charter,' or advertising it as such, Justice Osborne said during Tuesday's hearing.
Ashley Taylor, a lawyer with Stikeman Elliott LLP representing Hudson's Bay, told the court on Tuesday that there was no opposition to the Canadian Tire deal, which was reached after 'a robust' sales process.
Reflect Advisors LLC, the financial adviser handling that process, initially sent out materials related to the sale to 407 parties considered potential bidders, and received a total of 17 bids.
Hudson's Bay had been seeking a going-concern transaction to keep alive the operations of at least some of the stores.
The company pitched a plan to potential buyers or investors, proposing a turnaround of six Bay stores that had initially been left out of liquidation, as well as the e-commerce operations, according to a confidential memorandum prepared by Hudson's Bay in March, a copy of which was obtained by The Globe and Mail.
That plan would have required $82-million in investment in the first year, according to the document. No such buyer or investor emerged.
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