'We demand full and timely transparency from HBC on store closures, layoffs, and severance protections,' says CLC
The fate of nearly 9,000 Hudson’s Bay workers remains uncertain as the Ontario Superior Court has delayed a ruling on the retailer’s proposed liquidation plan. The company, which filed for creditor protection on March 7, has been unable to secure additional financing, putting all 96 of its stores at risk of closure.
Justice Peter J. Osborne announced Monday that he would postpone a decision on HBC’s liquidation proposal until Wednesday, granting more time for stakeholders to address concerns raised in court, according to the Toronto Star.
Meanwhile, the court extended the company’s creditor protection and ordered documents related to its key employee retention plan to remain confidential.
At the heart of the court proceedings is a dispute over unpaid rent to RioCan-Hudson’s Bay JV, a joint venture between HBC and RioCan Real Estate Investment Trust. The retailer operates 12 stores in properties leased from the JV, but company lawyers argue that its current cash flow does not allow for full rent payments, says the Star. Meanwhile, RioCan-Hudson’s Bay JV is pushing for immediate payment, with sources indicating that HBC has continued paying other landlords despite its financial struggles.
The proposed liquidation would see HBC shutter its operations entirely, including 80 Bay stores, three Saks Fifth Avenue locations, and 13 Saks Off 5th outlets. The process, expected to take up to 12 weeks, would also involve selling off nearly half a billion dollars worth of inventory, says the report.
Justice Osborne acknowledged the urgency of the situation, stating in his order: “Given the speed with which events were occurring and matters were developing, numerous parties had not had time to fully digest the relevant events.”
He has directed stakeholders to engage in discussions facilitated by the court-appointed monitor to seek interim resolutions, says the Toronto Star.
The court will reconvene on Wednesday to address unresolved matters, including HBC’s rent obligations, its plan to reassign leases, and a proposal to increase debtor-in-possession financing from $16 million to $23 million.
During Monday’s hearing, a lawyer representing HBC employees and retirees spoke against the liquidation plan, raising concerns about the mass job losses and severance entitlements. In response, the Canadian Labour Congress (CLC) issued a statement calling for the company to uphold its financial commitments to workers.
“We demand full and timely transparency from HBC on store closures, layoffs, and severance protections,” it said. "We demand that HBC honour its commitments—wages, benefits, and severance must be paid. No backroom deals, no vague promises—workers deserve full transparency.”
The organization also urged the federal government to ensure that employment insurance benefits are not clawed back from affected workers because of the severance and termination benefits HBC owes them.
“These commitments are not merely legal obligations but a matter of fundamental fairness and respect for the dedicated employees who have contributed to the company’s success,” said the CLC.
HBC, one of Canada’s oldest companies, has struggled financially in recent years. As of January 1, it had just $3 million in cash, with $1.13 billion in secured debt and $520 million owed to nearly 1,900 unsecured creditors, including landlords and suppliers.
