One of Canada’s largest mall landlords is suing a U.S. company tied to Hudson’s Bay Co., looking to recoup more than $75-million in losses related to the collapse of Canada’s oldest retailer.

The lawsuit, filed in Ontario by Cadillac Fairview Corp. Ltd. in October, seeks damages resulting from the closing of three Saks Fifth Avenue stores, which Hudson’s Bay operated under licence in Canada.

The stores were located at two malls in Toronto, CF Sherway Gardens and CF Toronto Eaton Centre, and one in Calgary, CF Chinook Centre, where Hudson’s Bay signed leases in 2014 and 2015.

The landlord argues that the money is owed because of an indemnity agreement it signed with a New York-based subsidiary of Hudson’s Bay, HBC US Holdings LLC. That agreement guaranteed to protect Cadillac Fairview against any losses or costs if the Canadian retailer became unable to pay rent on the stores or to adhere to the conditions of those leases.

None of the legal claims have been tested in court.

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Hudson’s Bay was granted court protection from its creditors in March, as it faltered under $1.1-billion in debt. Unable to find new investors, or to secure additional debt financing to prop up the business, the 355-year-old company was forced to close all of its locations across Canada.

The leases for the former stores were then disclaimed, meaning the company stopped paying rent and handed the spaces back to their landlords.

The companies first signed the indemnity agreement in June, 2023 – when Cadillac Fairview agreed to provide Hudson’s Bay with a $200-million term loan to prop up its struggling operations. Cadillac Fairview was the only party at the time willing to extend financing to the retailer, according to court documents filed as part of the insolvency proceedings.

At the time, Hudson’s Bay and Saks were owned by the same parent company, HBC L.P. Then, in December, 2024, the parent company closed a US$2.65-billion deal to buy Neiman Marcus Group. As part of that deal, it split off the Canadian operations from the U.S. business, now called Saks Global. Less than three months later, the Canadian operations commenced creditor-protection proceedings.

The parent company refinanced its debt at the time the Neiman Marcus deal closed, and the indemnity agreement with Cadillac Fairview was amended. In exchange for repaying $24-million of the term loan, Cadillac Fairview agreed to release HBC L.P. from its obligations, according to court documents filed in the insolvency proceedings.

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The remainder of the term loan, totalling $176-million, was converted to secured debt, a distinction that allows a lender to seize assets if a borrower fails to repay the money.

HBC US “reaffirmed its obligations” under the agreement in December, 2024, according to the statement of claim, which argues that those obligations still stand, despite the Canadian company’s insolvency and even though the leases were disclaimed.

A numbered company tied to Cadillac Fairview is listed among Hudson’s Bay’s secured lenders in its creditor protection proceedings. The company was still owed $176-million as of March 7.

Cadillac Fairview sent a letter to HBC US in early June, demanding tens of millions of dollars in payments owing over the period of the indemnity agreement, which continues until 2029. HBC did not respond to that letter, or to a follow-up sent in July.

According to Cadillac Fairview, the amounts owed under that agreement include total rent payments of $64.2-million; repossession, repair, insurance and maintenance costs of $10.7-million; $62,209 in utilities and service charges; $347,543 in pre-filing tax arrears; and $300,000 in legal fees.

Cadillac Fairview is also seeking legal fees and other damages, for a total amount yet to be determined.

Last week, HBC US filed a notice with the court of its intention to defend the action.