Hudson’s Bay Battles Lender Over Ruby Liu Lease Deal in Ontario Court

Hudson’s Bay Co. is pushing back against a motion filed by its senior lender, Restore Capital LLC, which seeks to terminate a controversial lease sale to billionaire Ruby Liu. The retailer has asked the Ontario Superior Court to dismiss the motion, arguing that the deal represents its best chance to recover funds for creditors amid its ongoing liquidation.

The dispute centers on Hudson’s Bay’s plan to sell up to 28 store leases—25 of which remain pending court and landlord approval—to Liu’s company, Central Walk. While three leases have already been approved for $6 million, Restore claims the remaining transaction is draining resources, citing over $18 million in rent and professional fees with no clear path to completion.

Hudson’s Bay CFO Michael Culhane defended the deal, stating that Restore was fully aware of the risks and had previously supported the transaction. He emphasized that Liu has already made a $9.4 million deposit and that the sale could generate significant recoveries for creditors.

Restore, however, argues that the deal is “illusory” and wants the court to appoint a “super monitor” or receiver to oversee the retailer’s wind-down. The lender claims Hudson’s Bay mismanaged its liquidation, failed to secure landlord approvals, and incurred unnecessary costs.

The court’s decision could determine whether Liu’s vision for a new department store chain moves forward—or if Hudson’s Bay’s restructuring takes a more drastic turn.