Court approves $18 million sale of HBC Royal Charter to Thomson, Weston

Two of Canada’s wealthiest families have passed the final hurdle in purchasing and donating the royal charter that created the Hudson Bay Company.

Ontario Superior Court Judge Peter Osborne on Thursday allowed the shuttered retailer to sell the 355-year-old document to companies related to the Thomson and Weston families for $18 million.

The families plan to immediately and permanently donate the charter to the Archives of Manitoba, the Museum of Manitoba, the Museum of Canadian History in Gatineau, Que., and the Royal Ontario Museum.

Each organization had already agreed to accept the charter, which had been issued by King Charles II on May 2, 1670, and permitted the creation of the HBC, which at the time was a fur-trading business.

The five-page vellum document was important to the country, as it gave the HBC control over one third of modern Canada during its colonization, centuries before Confederation.

It was put up for auction as Hudson’s Bay filed for creditor protection in March and has since closed all of its stores; The defunct company is selling its 4,400 items of art and artifacts to repay the money owed.

Osborne on Thursday approved extending HBC’s creditor protection period until March 31.

Thomson, who made his money in the media business, and Weston, a veteran of the grocery and retail world, were supposed to be the sole bidders in the charter auction, but a court had to approve their joint purchase before that could happen.

Court approval of the charter sale brings to an end a saga that has kept HBC’s lawyers and financial advisors busy for months.

Weston firm Whittington Investments Ltd. initially planned to auction the document before moving forward in July with a $12.5-million offer to purchase the charter and donate it to the Canadian Museum of History, a Crown corporation.

HBC was ready to accept Weston’s offer, but then David Thomson’s firm DKRT Family Corp. argued that it was waiting for the auction to make its $15 million opening bid. He wanted the charter to be owned by the Archives of Manitoba.

HBC decided to return to the auction plan and allowed Thomson to make the opening bid, until the two families combined to bid $18 million.

Reflect Advisors, HBC’s financial advisors, reached out to 150 people or companies to see if they would top the bidding. HBC stated that no one was interested, making Thomson and Weston’s bid the real winner.

“Reflect tried its best to generate a competitive auction, but when we finally got to that point, in light of the combined bidding and the inflated purchase price, no one wanted to participate,” HBC attorney Ashley Taylor said in court Thursday.

Still, “I think, we were left in a pretty good place,” he said.

Asad Moten, counsel for the Attorney General of Canada, agreed, saying that the Thomson and Weston plan was beneficial because it kept the Charter in Canada and ensured that it would be accessible to the public.

Moten said the charter has been kept in a protective box in storage since the lender protection case began, and before that, it was in a private office.

Before it is moved anywhere, the Canadian Conservation Institute will examine it to assess its condition and make recommendations on next steps, Moten said.

Thomson and Weston have said that the four institutions to which they will donate the charter will be designated “custodians” and will share the document equally. However, the family wants the charter to be first displayed in Winnipeg, where the HBC opened its first department store in 1881.

How exactly to share the Charter will be decided through a consultation process requested by Thomson and Weston with Indigenous groups, museums, universities, archives, subject matter experts and the public.

However, a term sheet, which was filed in Ontario Superior Court and signed by donors and recipients, offers a range of possibilities.

One of them is an arrangement where each institution gets a charter for “rotating multi-year periods on a mutually agreed schedule”.

The document states that other organizations not named custodians may exhibit the charter and unidentified “related artifacts” as part of the national tour.

When the charter is not on display at one of the four custodian institutions, the term sheet states that custodian organizations may perhaps display high-quality reproductions of the artworks.

The term sheet also contemplates a website being created to display the Charter and digital representations of other artifacts and documents and periodic seminars being hosted to teach people about the Charter “and its significance to the nation, Canadian history and Indigenous peoples over the centuries.”

Thomson and Weston have agreed to donate $5 million to fund these efforts and preserve the charter and share it with the public.

Future support has also been pledged by the Henik Family Foundation, as well as the Desmarais family and Power Corp. of Canada.

The Desmarais family is behind Power Corp., which has controlling stakes in insurer GreatWest Lifeco and IGM Financial. The Henik family founded the real estate firm Colliers International.