Hudson’s Bay Company has filed for creditor protection from the Ontario Superior Court of Justice, as the company undergoes a restructuring process, marking a turning point in its storied history spanning over three centuries.
In the filing, the company said the action was driven by a “severe liquidity crisis” that has left the retailer unable to meet critical obligations.
“Without the benefit of the Stay of Proceedings and the protections of the CCAA, Hudson’s Bay Canada do not have the available liquidity to meet its liabilities and will be forced to cease operations,” the applicant said in the factum, noting liabilities exceeding the $5 million threshold.
The restructuring filing outlines several key financial figures:
- A debtor-in-possession facility of up to $16 million to secure the interim financing needed for operations.
- An administration charge of $2.8 million to cover the fees and disbursements of the court-appointed monitor and legal counsel.
- A directors’ charge of $26.3 million to indemnify the company’s directors and officers against liabilities incurred during the restructuring
Hudson’s Bay, founded in 1670 and known as North America’s oldest company, has long been a retail cornerstone with 80 full-line department stores. However, in recent years, a combination of shifting consumer habits, increased competition, and recent macroeconomic headwinds—including trade tensions and tariff pressures—have severely undermined its ability to secure additional financing and monetize its extensive real estate portfolio.
The company noted that, following a privatization in March 2020, the subsequent COVID-19 lockdowns resulted in a significant decline in foot traffic, forcing the company to defer payments to suppliers and critical trade creditors.
“The debtors are in a liquidity crisis. Absent a stay of proceedings, individual creditors will seek to enforce their rights, jeopardizing the survival of the business,” the factum argues.
The next key milestone is the comeback motion scheduled for March 17, when the court will review the restructuring progress and evaluate any alternative financing arrangements proposed by Hudson’s Bay.
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