TORONTO – Hudson's Bay is preparing to return to court in a bid to gain approval for the sale of additional leases and to extend its reprieve from creditors. The beleaguered retailer is expected to appear before the Ontario Superior Court on Thursday morning.

During this court appearance, Hudson's Bay will seek permission to sell five of its leases to YM Inc., a clothing company that operates several mall brands, including Bluenotes, Urban Planet, Suzy Shier, and West 49. YM Inc. has expressed intent to pay $5.03 million to acquire properties previously held by Hudson's Bay and its sister business, Saks, at various locations: Vaughan Mills in Vaughan, Ontario; Tanger Outlet in Kanata, Ontario; Outlet Collection in Winnipeg; CrossIron Mills in Rocky View, Alberta; and Toronto Premium Outlets in Halton Hills, Ontario.

While YM has not specified which brands will occupy these locations, Hudson's Bay indicated in recent court filings that the landlords at all five properties have approved of the prospective tenant. Initially, YM had broader aspirations when a deal was established with Hudson's Bay on May 28, aiming to purchase leases at Pickering Town Center in Pickering, Ontario; Skyview Power Centre in Edmonton; and Midtown Plaza in Saskatoon for $1 million. However, landlord waivers for these properties were not secured.

In addition to the YM transaction, Hudson's Bay plans to seek court approval for the sale of its lease at Metrotown in Burnaby, British Columbia, to Ivanhoe Realties Inc. for $20,000. Since Ivanhoe Cambridge, the parent company of Ivanhoe Realties, owns the mall, this particular transaction is expected to proceed without opposition.

The potential sales stem from Hudson's Bay conducting a lease auction process, which attracted twelve bids for a total of 39 properties. Initially, Ivanhoe's bid was rejected due to its low price; however, subsequent negotiations resulted in a mutually agreeable deal.

Beyond the lease sales, Hudson's Bay will also seek an extension of its creditor protection, asking the court to prolong this reprieve until October 31. The company, which shuttered all of its stores earlier this year, asserts that the extension is necessary for them to organize their art and artifacts for auction and to obtain approval for selling an additional 25 leases to Ruby Liu, a billionaire based in British Columbia.

While Liu has already purchased three leases at malls she owns, her intent is to acquire about two dozen more, with plans to establish a new department store under her name. The proposed store will feature three tiers: flagship, premium, and standard. Liu is allocating a budget of $375 million for this venture, including $120 million for "overdue" repairs on roofs, HVAC systems, restrooms, elevators, and escalators. Additionally, Liu plans to invest $135 million in initial inventory and projects that her business will create at least 1,800 new jobs and generate more than $420 million in annual sales by 2027.

Despite the potential job creation, landlords have expressed strong opposition to Liu's plans, citing a lack of sufficient information regarding the business model she intends to implement in their properties. Furthermore, Restore Capital, one of Hudson's Bay's primary lenders, along with its parent company Hilco Global, have been challenging Liu's bid for the 25 leases. They argue that as the process drags on without approval, their financial losses increase and chances of recovery diminish.

In response to these ongoing disputes, a judge has established a series of deadlines for document submissions and motion filings in August. This schedule will enable the court to review arguments regarding Liu's proposed lease acquisitions by the end of next month.