The judge overseeing the restructuring of Hudson’s Bay Co. has nixed a proposed agreement between the retailer and its creditors, increasing the likelihood that lenders will push for receivership. The deal would have given HBC a deadline to save the six stores it hopes to spare from liquidation, while creditors would get more control over the restructuring process.
Landlords objected to the agreement, saying it gave too much power to lenders without sufficient court oversight and incentivized liquidation over restructuring. Judge Peter Osborne, in denying court approval for the deal, said the existing process under the Companies’ Creditors Arrangement Act was sufficient to protect lenders’ interests. But the agreement was seen by some observers as a key way to avoid a bid by creditors to place HBC into the more intensive process of receivership.
