Hudson's Bay to ask for court approval of Canadian Tire deal
Hudson's Bay is expected to return to court Tuesday morning to seek approval for a $30-million deal it signed with Canadian Tire Corp. Ltd.
If the deal gets the OK from Ontario's Superior Court, Canadian Tire will be able to buy the rights to Hudson's Bay's intellectual property, which includes its name, its coat of arms and its iconic stripes.
Court documents have also shown the deal includes the Bay's Distinctly Home brand, its Hudson North apparel line and trademarks like 'Bay Days' and the Zellers catchphrase 'lowest price is the law.'
The move to get approval for the Canadian Tire deal comes months after Canada's oldest company filed for creditor protection and days after it closed all 96 of the stores it ran under its Bay and Saks banners on Sunday.
Hudson's Bay has said the sale and closures were necessary because the 355-year-old company was not able to attract an investor to keep some semblance of the current business alive.
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Canadian Tire wound up being the winner of the Bay's trademarks after the company and its advisers invited 407 people and firms to bid on the intellectual property and other assets.
Adam Zalev, co-founder of Bay financial adviser Reflect Advisors, said in court documents that 17 bids were received. Thirteen were for intellectual property, but Canadian Tire's was 'superior to all other bids considered,' he said.
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Last days of Vancouver's flagship Hudson's Bay store
Hudson's Bay is expected to ask for a document describing why it chose Canadian Tire to be sealed because it contains commercially sensitive information, including the amounts offered by the next highest bidders.
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On top of taking over the trademarks, Canadian Tire will also assume a contract Hudson's Bay has with Pendleton Woolen Mills, an Oregon-based blanket and clothing maker.
After Hudson's Bay and Pendleton disagreed about the use of some multistripe and 'point' motifs in 2009, they reached a settlement that gave Pendleton a license for some Bay trademarks.
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Aside from being asked to approve the Canadian Tire deal, a court is also expected to hear two other Bay motions Tuesday.
The first is from RioCan Real Estate Investment Trust, which has a joint venture with the Bay.
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Hudson's Bay to sell its brands to Canadian Tire in $30M deal
The venture has leases for 12 properties the department store used, but RioCan wants to put the partnership into receivership to protect its stakeholders and maximize the value it can recover.
Receivership is a process allowing a third-party to take control of a company's assets, oversee their liquidation and repay creditors.
The court will also be asked to recognize the Bay as the former employer of all the department store's workers who have been terminated.
The declaration will allow the Bay's 9,364 staff, including more than 8,300 who have already lost their jobs, to recoup money they may be owed from the retailer under the Wage Earner Protection Program Act.
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People who qualify under the federal program can earn up to $8,844.22 this year.
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