BC mall owner's push to buy 25 Hudson's Bay leases faces landlord opposition: docs

An agreement Hudson’s Bay signed to sell about two dozen leases to a B.C. entrepreneur has encountered a major barrier, new court filings show: landlords who own the properties are overwhelmingly opposed to her moving in.

The Thursday filing is from Alvarez & Marsal Canada Inc., a court monitor appointed to help the Bay through creditor protection.

The document says landlords representing 23 leases in a group of 25 Ruby Liu purchased won't approve the plan and "would oppose any potential future forced assignment."

The Bay and a spokesperson for Liu both declined to comment.

Liu attracted attention last month when Hudson's Bay announced it had chosen her to purchase up to 28 leases for the retailer and its sister Saks banners in Alberta, B.C. and Ontario.

Three of those leases were at B.C. malls Liu owns — Tsawwassen Mills, Mayfair Shopping Centre and Woodgrove Centre. Court documents have shown Liu will pay $2 million for each of those leases.

The Bay will ask a court to approve that agreement Monday but has yet to present the broader 25-lease deal to judge Peter Osborne because it has been working to get landlords on board with the plan.

Court documents filed earlier this week showed landlords had "concerns" with the plan but did not detail what they were.

Liu wants to use the properties to open a chain of modernized department stores she will name after herself. She has told The Canadian Press they will sell makeup, jewelry and apparel but will also have play spaces for children, dining areas and entertainment space.

It is unclear whether the Bay's leases permit such activity. If they don't, landlords would have to agree to amendments for her pursue her vision.

Alvarez & Marsal says Liu and her lawyers are working to provide landlords with further information about what she wants to do with the spaces.

Under the Companies’ Creditors Arrangement Act, the Bay can ask a court to assign its leases to Liu, even if landlords don't readily agree.

In deciding whether to make the order, the act says the court must weigh whether the appointed monitor agrees with the move and whether Liu would be able to fulfil obligations in the leases and be "appropriate" to assign the contracts to.

In addition to the Liu deals, Alvarez & Marsal's filing reveals the Bay has been busy trying to find takers for its other leases.

The monitor says one party, which it did not name, is interested in up to eight leases in Ontario, Alberta, Saskatchewan and Manitoba.

It is also near to reaching a deal with an unnamed landlord who wants to acquire one of its own leases for $250,000.

The Bay had one other transaction in the works but Alvarez and Marsal say it fell through after an unnamed company refused to correct errors in the agreement and then backed away from the purchase.