Hudson’s bay counterattacks its lender demanding the end of the contract with Ruby Liu

Hudson’s bay retreated to one of its most important lenders. In a new request filed in court, the financial director of the missing department store refutes the accusations according to which he would have poorly managed his liquidation and would desperately seek to obtain an assignment of 25 of his leases.

In documents, Michael Culhane maintains that he is not Neither just nor credible from Hilco Global to criticize the retailer for Predictable, inevitable facts or, in many cases, motivated by Hilco’s conduct and commercial decisions.

The financial service company Hilco holds the main liquidator of the bay, Hilco Merchant, as well as Restore Capital, one of the main lenders of the detainer.

Many of the results that Hilco complains today are a direct consequence of the actions that she herself has taken in the exercise of her functions, or of the results she knew how to arise when she participated in the various processes she criticizes todaysays Mr. Culhane in a declaration under oath filed on Sunday with the Ontario Superior Court.

Restore Capital was part of the group which lent $ 151.4 million to the Bay last December. Last week, the company accused the retailer, in documents deposited in court, of having wasted the guarantees of lenders by forcing the sale of twenty leases to the British-Colombian billionaire Ruby Liu.

Contested buyouts

Ms. Liu, owner of three shopping centers, wishes to acquire the 25 properties in Alberta, British Columbia and Ontario to open a new department store in its name. It has already bought the leases from three properties of its own shopping centers, used by bay and its SAKS subsidiary, for $ 6 million.

However, the owners opposed her acquisition of their leases, saying that she had not provided a sufficient business plan, despite the announcement of the bay transaction on May 23.

Restore unveiled last week that she would ask a court on Tuesday to terminate the transaction, which is still to be approved by the owners and the court. Saturday evening, the company filed other documents supporting its arguments and qualifying the transaction with Ms. Liu of example most striking of the reason why his confidence in the management of the bay completely collapsed.

According to Restore, this agreement illusory is a misadventure which costs Restore and other lenders of the millions of dollars in rents and professional fees, an amount that could increase during the period when the bay will await the approval of the court for the transaction.

If the transaction fails, no product will be achieved, and the exorbitant costs incurred and to be engaged for its realization will never be recoveredturns back restore.

Lenders will be reimbursed, according to the bay

Mr. Culhane maintains that the sale should take place because it will generate liquidity important And that the retailer has no transactions offering better conclusion prospects.

Documents show that Ms. Liu paid a deposit of $ 9.4 million, which would be equivalent to a purchase price of $ 94 million for 25 leases.

Mr. Culhane claims that lenders should collect the fruits of the agreements concluded with Ms. Liu, from another unrecognized lease for which the company will ask for approval at the end of July and an auction that the bay plans to organize to sell its works of art and its artefacts.

He also reveals that the company thinks that its lenders will finally be reimbursed in full, because it seeks to obtain access to creditors to a surplus of their employees’ pension funds.

Mr. Culhane, who is also director of the exploitation of the bay, used the rest of his declaration under oath to contest the attempt to restore to extend the powers of Alvarez and Marsal, the controller previously appointed to guide the bay throughout the protection procedure against creditors.

If the court does not accept an agreement of super controllerRestore suggests appointing Richter Consulting as a receiver.

Restore indicates that this is necessary, because the bay has changed its liquidation by not correctly closing the stores and not removing facilities and equipment.

However, Mr. Culhane underlines that Hilco, with Gordon Brothers, Tiger, the GA and SB360 Capital group, trained a council of trustees to manage the liquidation of the bay, after the retailer filed a request for protection against creditors in March.

This grouping meant that Hilco, the owner of Restore, was involved daily in the liquidation. Supervisors were present in each store in the bay, and the trustee council had all latitude to fix the calendar and the prices of furniture, layout and equipment sales. The members of the trustee council were also eligible for a 15 % commission on these sales.

According to Mr. Culhane, Hilco provided that sales sales would reach around $ 17 million, excluding taxes, but that the actual figure was closer to $ 10.7 million.

Hilco attributes this shortfall of $ 6.3 million to late start -up and the shorter period of sales, the prolonged use of arrangements to present goods at an advanced stage of the process and the inability to attract buyers wishing large amounts of products.

Another key factor was the absence of discounts appropriate and aggressive On furniture, layouts and equipment to guarantee sales, despite repeated requests from the bay for larger discounts, recalls Mr. Culhane.