Billionaire Ruby Liu, centre, poses with her staff while holding a set of keys to a former Hudson’s Bay-owned department store in B.C. in June.DARRYL DYCK/The Canadian Press
The chief justice of the Ontario Superior Court has admonished Weihong (Ruby) Liu, the B.C. billionaire vying to buy more than two dozen Hudson’s Bay Co. leases, for e-mailing the judge overseeing the retail bankruptcy in order to press her case – correspondence that the court has deemed “inappropriate” and warned would be considered “harassing communications” if it continued.
The letter, sent by the office of the chief justice to Ms. Liu on July 15, was included in materials filed with the court on Tuesday. The correspondence to Justice Peter Osborne came from Ms. Liu, the chairwoman of real estate investment company Central Walk, based in Nanaimo, B.C., and from Central Walk’s chief executive officer Linda Qin, and praised the judge for “your grace, your dignity, your quiet but commanding presence,” while accusing the lawyers representing other parties in the case of “corruption.”
The correspondence also shows that Hudson’s Bay offered to knock $3-million off the price of the leases if Central Walk adhered to certain conditions, including hiring former Hudson’s Bay CEO Liz Rodbell as a consultant. Ms. Rodbell departed the retailer in June, according to her LinkedIn profile.
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A July 5 letter to Miller Thomson LLP, which was then representing Ms. Liu, from Ashley Taylor, a lawyer at Stikeman Elliott LLP representing Hudson’s Bay, explained that of the $3-million, half would go toward paying retainers to Ms. Rodbell; to KPMG LLP as a financial adviser; and to law firm Miller Thomson LLP in order to revise the Central Walk business plan for the stores.
Ms. Liu is currently embroiled in a battle over the future of empty Bay stores across the country. Ms. Liu has already paid $6-million to take over three store leases in malls that Central Walk owns. But 25 other leases included in a deal she reached with Hudson’s Bay in late May have faced significant opposition from landlords.
The court documents confirm previous reporting by The Globe and Mail that landlords decided to oppose the deal after meetings in which Ms. Liu was unable to provide details about her business plans.
For example, a letter from lawyers representing Cadillac Fairview Corp. to Ms. Liu’s then-counsel on June 11 stated that the commercial real estate giant’s repeated requests for information “have been steadfastly ignored.” At meetings on June 2, Ms. Liu “was wholly unprepared” to discuss her plans, and a subsequent letter to landlords lacked required details. Cadillac Fairview “is left with the strong impression that Ms. Liu is making this up as she goes,” the letter stated.
The letter from Mr. Taylor, the lawyer representing Hudson’s Bay, also stated that at those meetings, Ms. Liu “failed to provide adequate responses to basic questions” from landlords. The letter accused Central Walk of being in breach of the agreement with Hudson’s Bay, after refusing to “take the most basic and necessary steps to advance its bid,” and threatened to terminate the deal.
In response to the opposition, on July 9, Ms. Qin sent the letter to Justice Osborne, signed by Ms. Liu, asking him to “please give me a chance.” The judge disclosed the correspondence at a recent hearing, stating from the bench that “in no circumstances should any party attempt to communicate directly with me” as court proceedings continue.
In her letter, Ms. Liu called the judge “a person of justice and strength.” The correspondence was partially redacted.
“Is this what I have read of in books – true nobility?” the letter stated. “Or is it the lifelong defence of your own integrity and kindness? Or perhaps, is there also a silent sorrow in your heart at the compromises this world demands?”
The letter went on to provide further background on Ms. Liu’s life in China before her move to Canada in 2014, including starting a small wholesale business at the age of 16. She wrote that her family moved to Shenzhen to pursue further entrepreneurship. She wrote that in 2010, Chinese officials began “targeting entrepreneurs” with fabricated investigations.
Ms. Liu’s letter also revealed that she decided to leave China after “a so-called ‘angrily assaulting a reporter’ incident” that attracted “national attention.” The letter concluded with the statement that Ms. Liu is “a person of great capability” who planned to “create brilliance” in the future.
Another letter to Justice Osborne the following day, July 10, detailed disputes Ms. Liu had with former lawyers, and included the allegation about the $3-million deduction offer from Hudson’s Bay.
That second letter also argued that the landlords’ opposition would have occurred “no matter how perfect our business plan was,” and alleged that the landlords were hoping to regain control of the store leases without taking part in the court-supervised bidding process. It added that Ms. Liu had set aside $350-million in cash and was preparing for store openings.
“HBC has repeatedly threatened to terminate our agreement and forfeit our deposit,” the letter stated. “I sincerely thank you for your time and hope you can uphold justice in accordance with the law.”
Faced with mounting losses and carrying $1.1-billion in debt, Hudson’s Bay filed for court protection from its creditors on March 7. Since then, after the company was unable to secure investment for a plan to rescue some of its stores, the Bay closed all of its locations across the country – putting an end to the 355-year history of Canada’s oldest retailer.
The bidding process for the leases was designed to generate money toward paying back senior lenders. A total of 62 store locations received zero bids.