An Ontario judge has rejected a proposed restructuring agreement of Hudson’s Bay Company that would have given the retailer more track to save at the six stores that are not being liquidated, even when their creditors are surrounding closer.
In his decision, Judge Peter Osborne of the Superior Court of Justice writes that the proposal is not necessary or appropriate.
The agreement would not only have granted the department stores in conflict a deadline to rescue their remaining stores, but also imposed a budget that had to regularly inform the lenders Bank of America, restore capital and capital Pathlight.
Osborne said it was reluctant to approve the agreement in part because the budget did not appear to the court or other interested parties to review.
He said that the court designated by the Court to help guide Hudson Bay through its creditors protection procedures is sufficient to balance the rights of lenders with those of other interested parties instead of the agreement presented.
The lenders who argue in favor of the agreement saw it as a way to prevent them from being presented to the Judicial Administration, a process in which a bankruptcy has its assets seized so that they can be sold to pay the creditors.
