matrix
Active Member
I see. So the landlords have already lost the battle, no if ands or buts... Makes sense.
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nightstreak
Active Member
Not necessarily. But asking the Court to let landlords disclaim leases worth $100M is not the compromise it's seeking. The Court will likely grill Ruby Liu's proposal and if she collapses under pressure, maybe the Court will ask lower bidders to put forward their proposals or offer the landlords a chance to pay up. When all options are exhausted, then perhaps they'll get what they want and the leases are disclaimed. But we're far from that point. All Ruby Liu needs to prove is that she has the financial backing to build this new company while satisfying the lease terms to run a department store-like business. She's a billionaire, she has the money.
Important note: The Court already somewhat believes she can build this new concept store. It agreed to that when it authorized the sale of previous HBC leases — albeit to herself. Or perhaps it's just nodding over to landlords and saying: "Do what she did: buy your leases back if you want them".
Northern Light
Superstar
There are things going on here .......nothing is final.
nightstreak
Active Member
Well... don't leave us hanging.
I don't know how I got so invested in this darn thing. I'm reading 300 page motions late into the night.
If I had to guess into your body language which I can't see and the tone of your voice which I can't hear, it's that Cadillac Fairview and Oxford have a much more viable tenant waiting in the wings who'd rather invest $100 million into the development of those spaces than into buying paper and ink once owned by Hudson's Bay. A developer most likely. Hudson's Bay's spaces are far more valuable as condo towers with bases partitioned into smaller, more easily leased retail spaces.
stevensontransit
Active Member
So are there any bidders or competitors bidding on toronto's prime malls such as yorkdale, eaton centre, fairview, hillcrest, scarborough town centre, and cf markville so far?
nightstreak
Active Member
These have yet to be announced and the lease monetiztion process continues until at least July 31st as of the latest deadline. I find it incredibly hard to believe that these prime sites received no bidders. I know through the grapevine that Ruby Liu did not bid on Eaton Centre or Yorkdale. It's quite possible that Cadillac Fairview and Oxford put all their war chest into securing their most valuable properties while relying on legal posturing to get the others for "free".
Northern Light
Superstar
Well... don't leave us hanging.
LOL..... I share what I can........some shoes have yet to drop. I'm not burying anyone's career. Patience. It shouldn't be long.
While some of the higher value leases certainly would attract a range of options......
I think I would read the motions a bit more literally ......maybe someone isn't sharing all that much info with CF and Oxford.......
matrix
Active Member
This is what I figured as well. Their lawyers said as much in the RI article that there has been barely any communication about it.
matrix
Active Member
Also, if this will tell you anything- TJX wanting a Winners/HomeSense at the former Bay lease at Square One seems to be no longer happening. Instead, Winners is shacking up where the Urban Behavior used to be on the top floor across from Moxies. I didn't hear much about that change from anyone, in fact I learned that from this forum. So take that as you will that something's going on in the background- whatever that is, I don't know! But it sounds like there is too much going on with that lease for TJX and/or Oxford to be able to touch it.
matrix
Active Member
Ruby Liu lacks ‘foundational’ experience to run former HBC stores, Cadillac Fairview CEO says
Landlords oppose Liu’s plan to acquire up to 25 Bay leases to open a new chain of department stores
www.theglobeandmail.com
Unpaywalled link:
Seems like the case here is indeed not enough information being passed on, and when there is information, it's not really that convincing. CF says she had no business plan when talking to her initially, and within a few days she got back to them detailing plans; Projections that they would "turn a profit by 2026", communication with HBC suppliers that they would like to work with her, the fact they want to hire executives with retail experience and 2500-3000 employees, and that they have 500 resumes from former HBC staff. CF (and presumably Oxford and other landlords) do not find this realistic at all. And I have to say, profitability by next year? When you still haven't even opened the stores and they probably won't be open until next year alone? That's a little bit ridiculous so I see why they take issue with that! That's not usually how that works!
And just as I figured, CF also says it would be a better option for them to proceed with established retailers in the Bay boxes that customers already know, as opposed to a brand-new retailer like this that they are not quite confident in. And this is something I've been saying, taking on a new retailer like this all at once just adds more risk and increases the chances that they will wind back up in bankruptcy court in a few year's time all over again. It makes total sense, but of course you still have the issue of bankruptcy court having to sell it to the highest bidder.
It's times like these you wish you had a crystal ball...
nightstreak
Active Member
Ruby Liu lacks ‘foundational’ experience to run former HBC stores, Cadillac Fairview CEO says
Landlords oppose Liu’s plan to acquire up to 25 Bay leases to open a new chain of department stores
Unpaywalled link:
Seems like the case here is indeed not enough information being passed on, and when there is information, it's not really that convincing. CF says she had no business plan when talking to her initially, and within a few days she got back to them detailing plans; Projections that they would "turn a profit by 2026", communication with HBC suppliers that they would like to work with her, the fact they want to hire executives with retail experience and 2500-3000 employees, and that they have 500 resumes from former HBC staff. CF (and presumably Oxford and other landlords) do not find this realistic at all. And I have to say, profitability by next year? When you still haven't even opened the stores and they probably won't be open until next year alone? That's a little bit ridiculous so I see why they take issue with that! That's not usually how that works!
And just as I figured, CF also says it would be a better option for them to proceed with established retailers in the Bay boxes that customers already know, as opposed to a brand-new retailer like this that they are not quite confident in. And this is something I've been saying, taking on a new retailer like this all at once just adds more risk and increases the chances that they will wind back up in bankruptcy court in a few year's time all over again. It makes total sense, but of course you still have the issue of bankruptcy court having to sell it to the highest bidder.
It's times like these you wish you had a crystal ball...
As much as I’d also like to see more details and have had my doubts about Ruby Liu, I also think the landlords are acting in bad faith. They’re deliberately leaving out that Ruby Liu is a mall operator herself. She runs three successful malls that have little to no vacancy. To claim that she’s unable to do what they do even though she’s one of them, is disingenuous.
Look, she’s not only put up $100 Million of her own money, now she’s shown that she has the financing for another $300M to renovate and operate the stores. Either she’s insane and is going to lose her own money or maybe she does know what she’s doing.
I’ve browsed Central Walk’s LinkedIn and it is indeed full of photos of her meeting with HBC executives. If she hires back Hudson’s Bay’s core team and has its former suppliers lined up, then she has the institutional knowledge ready on day one to run the stores.
If I had to guess right now, the CCAA Court will grant her the leases, forcing assignment on the landlords and accept her $100M towards paying off Hudson’s Bay’s debt.
Her branding needs work but once she has a team assembled, maybe that’ll come together in the next stages. The smartest thing she could do right now — like now, before the court decides on her leases — is to hire Bonnie Brooks. Get an eloquent speaker with deep experience of Hudson’s Bay’s last successful era in front of the court and its game over.
Richard White
Senior Member
Here's the thing. These malls and landlords need a known commodity.
They can't take a chance on a startup business no matter how much money she has if it potentially costs them alot of money. If they can get simons in there over her for example, it's a no brainer.
I get what Ruby Liu is trying to do however she needs to understand that she's not a known commodity. Until the issues with HBC, how many people knew she existed outside those in BC?
After the target fiasco, I can see more than a few landlords having justification for saying no.
nightstreak
Active Member
The thing is, they can't say "no". They can raise their concerns and argue to the judge that they don't have confidence in her but ultimately, this is not a normal transaction.The duty of the court is to the creditors, winding down the business and ensuring debt is paid.
CCAA Section 11.3 empowers the court to approve the assignment of leases even if the lease prohibits assignment without landlord consent, provided that:
1. All monetary defaults (other than insolvency itself) are cured.
2. The proposed assignee is capable of performing the lease (i.e. financial and operational capability).
3. The assignment is necessary to a successful restructuring or value-maximizing liquidation.
Ruby Liu's bid meets all of these criteria. This was dealt with when the Court appointed Monitor along with Hudson's Bay approved her bid over others.
Speaking of Target, they were given a forced assignment of Sears' leases. Something Ruby Liu said resonated with me: it doesn't matter if you're established and have experience. The Bay had hundreds of years of experience and we're sitting in court dealing with its failure. I say, give her a chance. It's her money. Cadillac Fairview and Oxford are getting back Eaton Centre and Yorkdale. Let her have the 25 suburban stores she bid on.
Northern Light
Superstar
No.
Didn't happen.
They bought the leases of Zellers, from HBC.
They did not occupy any former Sears locations.
nightstreak
Active Member
Pardon, I was misremembering, just recalled that it involved Target Canada. It was Target's leases that were taken up by a CCAA court and sold to others despite landlord objections. Alvarez & Marsal were also the court appointed monitors in that case. Justice Morawetz said:
That's what I expect Justice Osborne to rule in this case.