The landlord of Hudson does not want Ruby Liu to be transferred, but the retailer still has a shot

A group of Hudson’s bay landlords do not want to transfer more than two dozen leases to BC billionaire Vihong (Ruby) Liu, but the department store still has a chance to find its way.

In March, the Gulf filed for creditor conservation conducted a process in the last several months, which to find buyers for its leases and to find Saks Canada. It agreed to sell Liu to 28 places.

The three leases were transferred to him without any hiccups as they are in the BC Mall, but on the properties organized by one of another Canadian commercial real estate firms.

Zamindars for 23 of those sites oppose the transfer. Many people have said in the court that they have been “very upset” with their conversation with Liu and “no productive discussion, no meaningful disclosure.” Liu insisted that if the court hands over it to the lease, the zamindars will heat her and her plan to open a new department store in her assets.

While disagreement can serve as a road to closure of the Gulf on its agreement with Liu, lawyers have not included the case that the retailer has another route to a deal.

This route is made in the arrangement of creditors of companies (CCAA)-The main insolvency law-2009 of Canada, which said Jeff Lee, Sanskatoon-based partner at MLT Aikins LLP.

Three criteria courts should consider the changes set when a new tenant was asked to assign the leases.

The first is whether the monitor is supported in sales or not, appointed by a court, independent third party that helps guide businesses through creditor protection.

In the case of the Gulf, there is monitor alverages and marsal. It is not yet to be mentioned that it supports Liu deal and has not responded to the requests for comments.

“Before bringing forward any court application, the company usually tested with them,” Lee said. “They are not just flying in the blind and hope for the best.”

The second aspect for the country for the court is whether the proposed new tenant is suitable. Lee said that it has been determined by seeing whether they can perform the duties of the tenant and pay rent.

Liu, who earned his money in Chinese real estate, has deep pockets, but his experience comes from being a landlord rather than a tenant.

On the final aspect, the court will consider whether the transfer of lease to Liu is “appropriate”.

Lee said that people should think about asking this question: “Is it proposed to have this post-assignment lease relationship for whom people have signed up, or they are trying to re-write the lease or change the playground so fundamentally that it is not appropriate?”

This is the place where most of the stress can lie in the case of the Gulf.

“You can’t go to CCAA as a tenant and then force your landlords to re-organize your pattas,” said Peter Tolnsky, a Vancouver-based partner of Lundel LLP.

The Canadian Press received a document last week that Liu’s lawyer sent the landlords underlining their plans. It says that she will take a “like a” like, where is “, but does not mention food, entertainment, children’s and fitness experiences, which she has told the media that she wants to include in her department store.

It is not clear whether the leases allow for use other than the department stores.

Some lenders owe more than $ 100 m

BC-based founder partner Jeffrey Dabbb in Gaflene Dabbes Cash said that with a request to re-hand over the leases, a court weighs the reference and think about whether the world of the landlord is being reversed due to the presence of this new tenant. ,

“The more it is a minor inconvenience to the landlord, the more likely the judge will order it,” he said.

Although Bay has not said whether it will look for an assignment, it is likely because the creditor protection is the duty of any company to show the court that it is doing his best to pay the companies back and pays money to the people, the dabber said. The Gulf has a 26-page list of creditors, with some lenders over $ 100 million.

A deal for sale of liquidation and selling the Gulf Trademark for Canadian tires For $ 30 million, a dent in an arrears, but Liu will also help sell leases.

Anyone who made a proposal for leases had to deposit 10 percent of his estimated purchase price. Court documents suggest that Liu deposited $ 9.4 million in addition to $ 6 million for three approved leases, which would be equal to the purchase price of $ 100 million for 28 leases.

When such a deal arrives, DABBS said that a company usually looks for the landlord’s consent because commercial leases have provisions, which prevent someone from transferring the lease without a property owner.

Objection to the landlords is not uncommon because any lease cannot be sold and not assigned to the property owners who can choose how to fill them and under what conditions.

These anchors are leases, Tolnsky noted.

“So they are probably very favorable for the Gulf or in a lot of cases for the tenant,” Tolnsky said, paying attention to the fact that the anchor tenants are often given attractive rent or conditions.

Thus, the landlords are more beneficial for the zamindars to get their properties back, an oakville, ONTS, the founder of the law firm, Monica Befe. If they do, they can charge high fare fees, fully develop them for new uses such as residential units or break them into small parcels that can be hired by a wide array of tenants.

If they do not and a court hands over the leases to Liu, the landlords will probably be seen closely to ensure that it does not violate any condition of the agreement.

Dabbes said: “The landlord can be hoarse, if the tenant is violated, but keep it in this way, they do not want to trust him.

“If they do not want this lease being assigned, they will fight it properly.”