pc28����

Secured creditors have the highest priority when it comes to being paid by the company and they have the right to seize and sell assets to recover amounts owed if necessary.

The company did not respond to a request for comment Thursday. But Liz Rodbell, president and CEO of Hudson’s Bay said in a news release last week that the company’s goal “is to re-establish our foothold and ensure the company’s long-term place in the evolving Canadian retail market.”

As of Jan.1, 2025, the retailer only had about $3 million in cash on hand and $1.13 billion in secured debt, including $724.4 million in mortgages, according to the court documents.

The company also owes the remainder of its creditors — some 1,883 companies which are unsecured lenders — an amount totalling $520 million.

Among them, some well-known fashion and beauty brands are listed, such as Ralph Lauren, which is owed $16 million, Estée Lauder, which is owed $9 million and Chanel, which is owed $5 million.

Most of the creditors are in Canada, but Hudson’s��Bay also has 449 creditors in the U.S., 24 creditors in China and dozens more in other countries.

The amounts the retailer owes to its employees and customers are listed as “to be determined” in the document.

In its application under the Companies’ Creditors Arrangement Act (CCAA), Hudson’s Bay said it is struggling to pay service providers, landlords and vendors and has had to defer some payments for many months, as it also deals with the U.S. trade war and a drop in downtown foot traffic since the pandemic.

The company rents retail locations in shopping malls owned by some subsidiaries of the Ontario Teachers’ Pension Plan Board, making the board one of the largest landlord creditors. The company owes $5 million to Ontrea Inc., which owns the Eaton Centre and Chinook Centre in Calgary, and $1 million to Cadillac Fairview.

Hudson’s Bay also owes millions of dollars to Canadian governments, including $8 million to the federal government, $5 million to Quebec, $2 million to B.C., and $1 million to pc28����Hydro.

David Ullmann, an insolvency specialist who is acting for some creditors in connection with the restructuring, explained that under the CCAA process, a company advises the court of the crisis it is experiencing and explains why it feels it needs protection from creditors.

If the court grants an order for creditor protection, the company is required to come back to court in 10 days to justify the order, usually before several stakeholders, such as creditors, landlords, employees and the Crown who may not have had notice of the original hearing. In Hudson’s Bay case, that return date is Monday, March 17.

“Creditor protection refers to the idea that during this process, the company is protected from the creditors taking remedies against the company or its assets. This provides a pause so the company can try to propose a solution which benefits as many creditors and stakeholders as possible instead of playing whack-a-mole as each creditor demand pops us. That is what Hudson’s Bay is doing,” said Ullmann.

“However, not all companies in creditor protection are able to restructure and survive.”

Thousands of jobs are on the line as the iconic department store chain is expected to close around 40 of its 80 stores across the country, according to a source familiar with restructuring discussions.

While the union is still in the dark, it expects to learn more after Hudson’s Bay meets with the appointed monitor, Alvarez and Marsal, later this week, said Dwayne Gunness, president of Union Local 40, which represents nearly 600 employees at the Kitchener and CF Sherway Gardens locations, as well as the company’s e-commerce department.

“Whatever information comes out of that will hopefully be proven so we know how to best position ourselves to address the needs of our members,” Gunness said, adding that the company is now maintaining its payroll.

The staff at the Hudson’s Bay e-commerce department had been cut from 325 to 60 over the past year, Gunness said, but the company recalled 100 employees on Sunday.

Andrew Hatnay, a partner with the law firm Koskie Minsky and who is representing some Hudson’s Bay employees and retirees, says he and his clients are eager to see what the company’s restructuring plans are and how it intends to pay back creditors.

“If the Bay starts terminating employees without paying severance pay and other amounts owing to them, which is common unfortunately in many CCAA proceedings, the terminated employees will be in a difficult situation,” he said.

Hatnay added that the Hudson Bay employees and retirees he represents are also concerned about pension plan contributions that may be owing to them. Others, on long-term disability, fear for their disability payments.��

A company spokesperson previously declined to comment on whether workers’ pensions are safe, but according to court documents, the Hudson’s Bay Company Pension Plan is “sufficiently funded and is able to satisfy its liabilities.”

At midday on Wednesday, the company’s flagship store on Queen Street in pc28����felt eerily empty with only a handful of shoppers browsing the crowded aisles despite clearance and discount signs on many items. Just next door, the Eaton Centre buzzed with energy and crowds.

Kevin Limbombe, who was shopping for leather shoes at the store, said the Bay’s potential closure will “hurt a lot of people” looking for unique and affordable clothing “when there are not that many options when it comes to professional wear, athletic attire.”

When Hudson’s Bay closed its Bloor and Yonge store in 2022, Limbombe just launched his professional career and bought a suit for $200 there during a clearance sale.

“It’s unique and at the same time we’re gonna miss this significantly,” he said.

Clarification - March 14, 2025

A graphic accompanying this article was updated to make clear that it highlights debts owed to select creditors only and to note that the $430 million figure is the debt owed to four secured creditors.����