Hudson's Bay enters court led wind down, liquidation accelerates

Hudson's Bay Company is in the midst of a formal wind down under court supervision after its creditor protection filing earlier in 2025, a process that moved this spring from store by store closures to contested hearings over asset sales, lease monetization and rival lender proposals. A March 10, 2025 judgment by Justice Osborne set out the legal timetable and underscored the melancholic nature of supervising the insolvency of a retailer founded in 1670, while stressing the need for court oversight to manage competing claims and to avoid contagion among co tenants through an orderly extension of the statutory stay.

Court activity intensified in mid March. A comeback hearing opened on March 17, 2025, and after submissions from multiple parties the court delayed immediate approval of a full liquidation and directed a continuation on March 19, 2025. By March 24, 2025 the company and its Court appointed Monitor, Alvarez and Marsal, had begun a coordinated liquidation across stores, a process Retail insider and the Monitor reported would run through June 1, 2025 with a short retrieval period for furniture fixtures and equipment purchasers to follow.

At the time of the March proceedings filings by Kmlaw show 87 stores already in liquidation, with six additional outlets remaining at issue. A lender led Restructuring Support Agreement surfaced late in March, and would have transferred effective control of the Companies Creditors Arrangement Act proceedings to those lenders while requiring liquidation of the remaining six stores unless HBC was sold by April 4, 2025. The RSA also would have restricted certain payments by the company, raising concerns among employee and retiree representatives.

Operationally the Monitor reported that roughly 90 percent of distribution centre inventory had been delivered to stores, and the balance excluding large furniture pieces was expected by May 16, 2025. The Monitor's third report recommended the court extend the CCAA stay to July 31, 2025, permit distributions to senior secured lenders and continue oversight of a sale and solicitation process and a lease monetization plan. Those measures would preserve options for a sale or orderly monetization rather than an accelerated lender driven liquidation.

Worker representation has been formalized. Ursel Phillips Fellows Hopkinson LLP was appointed as employee representative counsel to address claims benefits and entitlements, and Kmlaw filed an aide memoire on behalf of employees and retirees during the March hearings to underline the potential harm of a full liquidation to Canadian workers and pensioners.

The outcome will shape recoveries for secured creditors and landlords and echo across Canada’s struggling department store sector. An extended stay and a managed sales process could boost recoveries relative to a lender imposed liquidation, while rapid liquidation would hasten vacancy spikes in shopping centres and complicate co tenant leases. The Monitor and court timetable now will determine whether leases can be monetized and assets sold in whole or in part, or whether remaining operations will be wound down, a decision with measurable consequences for creditors, landlords and thousands of retail employees. Canadian Press coverage on December 11, 2025 noted the company is continuing a formal wind down, leaving the final distribution and lease outcomes to the court supervised process.