Hudson’s Bay gets another extension protecting it from creditors

Hudson's Bay filed for bankruptcy last year. Photo by Gavin Young/Postmedia files

Article content

An Ontario court on Thursday approved a three-month extension protecting Hudson’s Bay Co. ULC from its creditors.

Article content

Judge Jessica Kimmel pushed the end of the stay period, a court order that suspends any further legal proceedings, to June 30, reported Canadian Press. Before the extension, the collapsed retailer’s reprieve was set to expire on March 31, more than a year after Hudson’s Bay (HBC) first sought creditor protection for about $1 billion owed in debt.

Article content

Article content

Article content

HBC has requested extensions to the stay period several times.

Article content

Article content

Court documents said the extension would assist with auctions of the company’s remaining art and artifacts and complete the distribution of hardship funds to former employees, among other things, including “pension surplus matters as applicable.”

Article content

HBC boasted a collection of more than 1,700 pieces of art and more than 2,700 artifacts that “reflect the rich heritage and cultural legacy of the company,” it said in a court document from April 2025.

Article content

In February 2026, an Ontario court approved the creation of a $250,000 hardship fund for former HBC employees and retirees, tapping into a $9.9 million Zellers trust and about $1.6 million in Manulife reserves.

Article content

There has been a long-running dispute between HBC and former employees of the defunct department store chain, Simpsons, over HBC’s Dumai Pension Plan.

Article content

The Dumai Pension Plan, originally created for former employees of Simpsons, was taken over by HBC when it acquired Simpsons in 1979, and was later expanded to include certain Zellers and Kmart employees.

Article content

Article content

However, a lawsuit brought forward in the 2000s by previous Simpsons employees claimed HBC diverted about $111 million in assets from the original Simpsons plan toward funding the new separate defined contribution plan for Zellers and Kmart employees.

Article content

Article content

In 2007, a judge ruled that HBC could use the pension plan surplus to pay its obligations to the broader defined contribution group while the plan remained active but also held that former Simpsons employees would be entitled to any remaining surplus assets if the plan was ever wound up.

Article content

In 2011, an Ontario court dismissed a cross-appeal from HBC, ruling the plan documents established “an irrevocable trust, over all of the assets in the pension trust fund, for the exclusive benefit of the employees.”

Article content

After HBC filed for bankruptcy last year, a class-action application was filed by Koskie Minsky LLP in June on behalf of workers who participated in the Simpsons pension plan, The Canadian Press reported.

Article content

The filing reportedly noted that as of Jan. 1, 2024, there was about $167.03 million in a trust fund linked to HBC’s overall plan, citing annual pension statement reports sent from HBC to Simpsons workers.

Article content

HBC lawyer Ashley Taylor of Stikeman Elliott LLP, and the court-appointed monitor Alvarez & Marsal Holdings, LLC did not respond to requests for comment.

Article content

Article content