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An Ontario judge has blocked B.C. billionaire Weihong Liu’s attempt to take over 25 Hudson’s Bay leases for a new department store, ending a months-long saga that has seen her clash with some of Canada’s most prominent commercial real estate firms. The ruling found Liu’s proposed business plan “deficient” and her company “fell well short of a reasonable standard” in assessing its ability to fulfil the lease obligations, according to Ontario Superior Court Justice Peter Osborne. Osborne wrote that he agreed with the evidence provided by the opposing landlords that Liu’s $375-million equity commitment is unlikely to sufficiently fund the new department store. The judge also found the projected financial outlook does not appear reasonable, and Liu’s business plan is “high-level and conceptual,” showing little appreciation for the complexity of the work required and its associated costs. The business plan has a “superficial, high-level approach. It clearly remains a work in progress,” wrote Osborne. The court order marks the failure of Hudson’s Bay’s attempt to compel the transfer of its leases to Liu, chairwoman of mall owner Central Walk, in a transaction valued at $69 million as part of a process to recoup more than $1 billion in debt to pay back its creditors. Liu, an immigrant from China and a self-made Chinese entrepreneur, acquired three shopping malls in British Columbia after 2020; all three housed Hudson’s Bay stores. In June, she paid $6 million to take over the leases when Hudson’s Bay put all of its real estate assets on sale. The retailer returned most of its other leases to landlords for free after failing to find buyers. “I will appeal,” Liu said in a statement to the Star in Mandarin. “I obviously don’t understand and feel hurt, so why did we have to buy those three stores ourselves? Either HBC committed fraud, or the court was unfair.” Liu’s appeal would require Hudson’s Bay’s backing, even though creditors have accused the retailer of wasting money on her deal and reducing recoveries on their outstanding debt. Since April, Liu has used Chinese social media to express her interest in purchasing Hudson’s Bay and to chronicle her bidding journey in a highly public manner. Liu lost her bid for Hudson’s Bay’s intellectual property to Canadian Tire but remained the only prominent bidder for the retailer’s leases, with the ambition of launching a department store chain under her English name, “Ruby Liu.” Osborne’s ruling vindicated eight landlords, representing 24 of the 25 leases, in their hard-fought battle to keep Liu’s company — seen by them as a “doomed-to-fail” start-up with no retail experience — off their properties. In his ruling, Osborne expressed concern about the lack of experience within Liu’s senior management team, noting that some members, including CEO Linda Qin — who was until recently a real estate agent — have no track record in the retail business. The team’s efforts to hire certain former HBC executives and managers were incomplete, he added. “The overall lack of experience at the leadership level represents a significant risk to the operational viability of launching and managing 25 large department stores in the contemplated timeline,” Osborne said. Liu’s bid has been steeped in controversy from the outset. On one hand, some former Hudson’s Bay employees voiced optimism and enthusiasm about the Canadian retail upstart and its potential to save thousands of jobs. On the other hand, landlords and Hudson’s Bay expressed unease over the self-made Chinese entrepreneur who allegedly bent the rules by arriving at meetings unprepared, failed to provide sufficient information about her business plan, and directly communicated with the judge to accuse the landlords’ lawyers of corruption — only to be cautioned later that such actions could constitute harassment. Liu dismissed the judge’s comment about her lack of experience in a text to the Star on Friday evening. “Those with experience often become a barrier to innovation. How can you know I won’t succeed if you don’t let me try?” she said.
