RioCan seeks receivership status for its Hudson's Bay joint venture | Daily Hive

Hudson's Bay's downtown Vancouver flagship store. (AlbertArt/Shutterstock)

RioCan Real Estate Investment Trust is turning to the courts to stabilize and restructure its troubled retail property joint venture with Hudson’s Bay Company (HBC), following HBC’s insolvency proceedings and halted rent payments.

In an application filed with the Ontario Superior Court of Justice this week, RioCan is requesting the appointment of FTI Consulting Canada Inc. as receiver and manager over a dozen commercial properties jointly held with Hudson’s Bay.

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The 2015-created joint venture, in which HBC holds a 78 per cent interest and RioCan per cent, has been thrown into financial disarray after HBC entered Companies’ Creditors Arrangement Act (CCAA) protection in March 2025 — a move that RioCan strongly opposed at the time, when the court was considering the application.

This joint venture owns 12 Hudson’s Bay locations in total comprising five freehold stores (downtown Vancouver, downtown Montreal, downtown Calgary, downtown Ottawa, and Devonshire Mall in Windsor) and five head leasehold stores (Yorkdale Shopping Centre and Scarborough Town Centre in Toronto, Square One Shopping Centre in Mississauga, and Carrefour Laval and Promenades St. Bruno near Montreal), plus two stores jointly owned by the joint venture and RioCan (Oakville Place and Georgian Mall in Ontario), each holding a 50 per cent stake.

Condition of Hudson’s Bay’s downtown Vancouver store in its final days, as seen on May 24, 2025. (Kenneth Chan)

According to court filings, HBC has since stopped paying rent under the lease agreements. The lease payments were the main source of revenue for the joint venture’s operations, including servicing over $800 million in secured debt across nine financing arrangements.

Among the creditors are major financial institutions such as RBC, BMO, and RioCan itself. RioCan alone is owed approximately $38 million in second mortgage debt related to the Georgian Mall and Ottawa properties, with multiple security interests in place.

The receivership application comes after HBC’s sales and lease monetization process in the CCAA proceedings failed to generate acceptable bids for store locations under the joint venture.

Earlier this month, court filings revealed that 17 bids had been submitted for Hudson’s Bay’s assets, with 12 parties submitting qualified bids covering a combined total of 29 individual leases. Several locations received multiple bids, reflecting overlapping interest, while a significant portion of the company’s holdings — 62 locations — did not receive any qualified bids. B.C. billionaire Ruby Liu (Weihong Liu) was a major successful proponent, signing a definitive agreement to acquire up to 28 store leases in B.C., Alberta, and Ontario which are still subject to landlord and/or court approval.

For its properties in the joint venture, RioCan states immediate court-supervised receivership is needed to preserve property value, seek new tenants, and potentially reposition or redevelop the assets. “A single global receivership proceeding is the most efficient mechanism to protect and maximize value for all stakeholders,” the filing states.

The proposed order would empower the receiver to borrow up to $20 million to fund operations, with borrowing and receivership costs prioritized through charges on the properties. It also includes provisions for lenders with priority charges to opt out of the receivership process under specific conditions.

A hearing on RioCan’s application is scheduled for June 3, 2025. HBC is expected to consent to lifting the stay of proceedings to allow the receivership to proceed.

Earlier this spring, RioCan indicated it saw total valuation losses of $209 million in its joint venture with Hudson’s Bay. As of the end of March 2025, the joint venture accounted for 0.6 per cent of RioCan’s total equity — down from 3.3 per cent at the end of December 2024.

After 355 years, on Sunday, June 1, 2025, Hudson’s Bay is expected to end its liquidation sales — which first began just over two months ago — and permanently close all store locations. Over 8,000 staff will be laid off on the same day, the retailer will fully vacate its locations by about mid-June, and the company will fully wind down its operations later in the summer.

Under a $30 million deal, Canadian Tire will own the brands, logos, stripes, and other intellectual properties of Hudson’s Bay.

Condition of Hudson’s Bay’s downtown Vancouver store in its final days, as seen on May 24, 2025. (Kenneth Chan)

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