Preliminary concept of the department store named after Ruby Liu. (Central Walk)
After months of court deliberations and intense public scrutiny from Canada’s largest commercial real estate landlords, creditors, the court-appointed monitor, industry experts, and the media, the Ontario Superior Court of Justice has rejected a proposal from the now-skeletal remnant entity of Hudson’s Bay Company (HBC) to assign 25 department store leases across the country to B.C.-based businesswoman Ruby (Weihong) Liu for the creation of a new Canadian department store chain.
Justice Peter Osborne announced his decision on Friday not to sell the leases to Liu as a major part of the ongoing dissolution process of the historic retailer’s assets under the Companies’ Creditors Arrangement Act (CCAA), and the written ruling was published online on Monday. The judge’s decision was based on thousands of pages of evidence, including affidavits and cross-examination transcripts from both “fact witnesses” and experts, including Ernst & Young (EY) and Revesco Properties.
Liu, who owns B.C.-based developer and mall operator Central Walk, has the ability to appeal the decision. As of the time of writing, Liu has yet to publicly address the court’s ruling.
In late May 2025, HBC entered into an agreement with Central Walk to acquire 28 store leases. In mid-July 2025, Justice Osborne approved the buyback of three leases held by HBC at three B.C. mall properties owned by Liu’s company at Tsawwassen Mills in Delta, Woodgrove Centre, and Mayfair Shopping Centre in Victoria.
But the remaining 25 store leases, located in suburban malls of B.C., Alberta, and Ontario, owned by other landlords, proved far more contentious. An overwhelming chorus of Canada’s leading commercial real estate companies voiced strong opposition to transferring the leases to Central Walk — opposition that only intensified and became more blunt over the summer as more details, or rather the lack thereof, emerged about Liu’s plans and the apparent disorganization behind them.
The landlords that fervently opposed the handover of their properties include Cadillac Fairview, Oxford Properties, Kingsett Capital, Ivanhoe Cambridge, Primaris Management, QuadReal Property Group, Morguard Investments, and Westcliff Management.
The 48-page ruling underscored the significance of the fact that even Alvarez & Marsal Canada — the court-appointed monitor overseeing HBC’s CCAA proceedings — declined to endorse the lease sale to Liu. This, noted Justice Osborne, was despite the fact that Liu’s company had submitted the highest monetary offer, one that could have made a meaningful dent in HBC’s towering debts to its creditors.
“The Monitor is a court officer. It is not a stakeholder with a beneficial interest in the outcome of these motions… The decision of the Monitor to not approve the proposed Transaction is significant in my view,” reads the ruling.
“Notwithstanding all of that, and perhaps most importantly, notwithstanding that the proposed Transaction represents both the highest bid for these assets and the potential for a very material recovery to creditors (approximately $50 million), the Monitor still concluded that the Transaction ought not to be approved.”
The total price that Liu’s company offered to buy all the store leases was $69.1 million. Each lease had its own portion of that total amount assigned to it. But after subtracting certain costs — about $15 million in repair or “catch-up” payments that HBC owed to landlords (called “cure costs”), and another $4.5 million in commissions — the actual amount HBC would receive from the sale would only be around $50 million.
Some of these leases would span well into the 21st century; highly favourable lease agreements hammered by HBC decades ago, such as for some properties owned by Morguard Investments and Westcliff management, would end between 2060 and 2091, if the renewal term options are exercised by the leaseholder.
Although Central Walk submitted the highest bid, significant concerns later emerged regarding the source of its proposed $375 million investment — funds that were to finance both the lease acquisition and the launch of the new department store chain. Liu also greatly leaned on her “three successful and valuable malls” in B.C. to support the new business.
But most of the money that Liu’s company claimed would back its $375 million investment is not actually in Canada — it is sitting in accounts or assets located in Barbados, Hong Kong, and Singapore. And importantly, that money is not locked in or legally committed to funding the deal. The company could use it for something else at any time. Furthermore, her personal assets are also offshore.
Her ownership of Tsawwassen Mills mall — acquired from Ivanhoe Cambridge in 2022 — is also described as “indirect at best.” Her connection to this Metro Vancouver mall is complicated; she owns a company in Hong Kong, which owns part of another company in B.C., which in turn owns only 30 per cent of the company that actually holds the lease for the mall. The other 70 per cent of that company is owned by her sister.
And to top it off, the land the sprawling mall sits on is a reserve of the Tsawwassen First Nation. Central Walk bought the 99-year lease previously held by Ivanhoe Cambridge, which carries less value than standard fee simple ownership.
Furthermore, the court found that all three of Liu’s malls in B.C. are losing money and can only stay afloat because they receive large loans from her other related companies — loans on which no interest is charged. In other words, the malls aren’t generating enough income to cover their expenses on their own.
On top of that, each of these three properties is already burdened with substantial debt to outside lenders: Woodgrove Centre owes $87.6 million, with Ms. Liu personally guaranteeing the loan; Mayfair Shopping Centre owes $141.9 million, with the lenders holding the right to collect rent directly if necessary; and Tsawwassen Mills owes $113.8 million under similar conditions.
Together, these factors show that the malls are heavily mortgaged and financially unstable, relying on Liu’s network of companies just to stay solvent.
The mortgages for all three malls will mature before mid-2027, which means she will have to pay them off or refinance them soon.
If she needed to raise money by selling one or more of the B.C. malls, it is uncertain how much — if any — profit she would actually make once those large debts were paid off. For these reasons, she is asset-rich on paper but cash-poor in reality. Her properties are too deeply tied up in debt to give her meaningful leverage or liquidity to support her dream of opening a department store empire across three provinces.
Shortly before announcing her plan to pursue HBC’s leases this past spring, Liu listed Woodgrove Mall for sale, but it is believed that the net proceeds from a potential future sale — based on the property’s assessed value — would not be enough to repay the related loans, never mind generating available funds to support the new retail enterprise.
These problematic financial and equity aspects were revealed by various opposing landlords in their submissions to the court, and the judge wrote, “I share those concerns.”
Another significant flaw in Liu’s strategy was her department store business plan, which was widely criticized by opposing landlords and retail experts as highly unrealistic and lacking in technical detail.
The new department store chain would be named “Ruby Liu,” after Liu herself.
Out of the $375 million in equity capital, about $120 million would go into store repairs and renovations, spent over 12 months through August 2026.
Justice Osborne sided with the opposing landlords’ belief that this repair and renovation budget is grossly insufficient, with the only evidence supporting the budget provided in a single-page spreadsheet. “There is no backup for the figures provided,” he wrote in the ruling.”
This amounts to an average renovation and repair budget of $30.60 per sq. ft. or just $4.7 million per store, despite the fact that many HBC locations are massive spaces generally exceeding 100,000 sq. ft., with some spanning multiple levels. Moreover, it is widely known that many stores are outdated and have suffered from years of neglect during HBC’s final stretch, as the retailer deferred essential maintenance when its financial problems began to really snowball.
For comparison, reads the ruling, other Canadian department store retailers spent $10.9 million to $37.5 million — or $87.00 per sq. ft. to $329.00 per sq. ft. This is based on the examples of Target in 2011 and Simons in 2024, respectively.
“The evidence led by certain of the Opposing Landlords suggests that this budget is low, according to independent building assessments. If the quantum required for necessary store repairs and renovations proves to be closer to the projections of the Opposing Landlords, and absent further funding, the Business Plan will not be viable,” reads the ruling.
Central Walk’s timelines for repairing, renovating, and opening the stores were also deemed to be impractical.
The new department store’s locations would be classified under three tiers — flagship, platinum, and standard.
Out of the 25 locations being contested by the opposing landlords in court, 12 were envisioned to be standard stores with a size of 85,000 sq. ft. to 110,000 sq. ft., and seven would be platinum stores ranging between 100,000 sq. ft. and 150,000 sq. ft. Flagship stores would be 150,000 sq. ft. and over.
Among the disputed properties owned by third parties, half of the flagship locations would be located at Cadillac Fairview properties, including CF Richmond Centre, CF Chinook Centre, and CF Sherway Gardens.
Altogether, the department store chain would have a total of 28 locations, including the three stores at B.C. malls owned by Central Walk.
Flagship stores would take 12 months of repair and renovation work upon the issue of building permits from municipal authorities, while platinum and standard stores would see six months of work.
But building permits can take months to receive, and the lead time to receive the parts for complex work to renovate and repair certain building systems — such as escalators, elevators, and HVAC units — can take about 15 to 20 weeks or even longer. Such work could take months more.
“This alone puts the entire timeline for store openings in jeopardy,” wrote the judge.
And all of this comes after the yet-to-be-performed, time-intensive, detailed architectural design process involving teams of contracted architectural firms and interior designers.
“As highlighted by the Landlords, the Purchaser must hire interior designers and architects to develop concepts and detailed plans, engage contractors, secure permits and satisfy regulatory requirements, source construction and FF&E (furniture, fixtures, and equipment) materials, and then actually complete the work to renovate the stores to the high level required. None of that has been done,” continued the judge’s ruling.
Another $135 million out of the $375 million would go into buying the initial goods and merchandise inventory needed, which is an average of $4.5 million per store — below HBC’s average of $7 million per store.
The business plan assumed that the department store would be able to start placing orders and get enough inventory to fill all the stores and meet its sales goals. This critical part of the plan was supposed to be handled by a third-party retail logistics company called J2. However, the opposing landlords raised serious doubts about whether even J2 could realistically stock an entire department store chain of that size.
Things got worse when, under questioning, Liu admitted that her company no longer planned to use J2 at all — and had no replacement for handling supply chain or shipping operations. The court monitor confirmed that there was no mention of any backup plan in the evidence, and none was provided during the hearing either. Despite this, Liu’s team simply claimed in their written submission that the “business plan is still being refined” and insisted they would somehow have the necessary inventory ready on time — even though there was no clear plan or partner to make that possible.
The business plan set aside up to $5 million of the investment package towards building out the department store’s information technology infrastructure, such as point-of-sale systems, product management systems, and other digitized operations. The court-appointed monitor noted that there is no specific plan and timeline to achieve this system, and a potential provider to build up the digital infrastructure has yet to be identified. Potential delays with launching such systems could delay the acquisition of inventory and the opening of stores.
These information technology systems do not include e-commerce, even though online sales now make up an ever-increasing sizeable portion of overall sales revenue, such as 36 per cent for Nordstrom and 15 per cent for Walmart.
They proposed hiring 1,800 staff to operate 25 stores, representing an average of 72 employees per store. To their credit, Central Walk vowed to prioritize hiring former HBC employees. However, the judge took issue that such staffing levels would be lower than HBC’s average of 97 employees per store — a ratio that was “regularly criticized for understaffing” and contributed to HBC’s demise. Justice Osborne doubted that the department store would operate at a “first-class level” with 25 per cent fewer employees.
The judge agreed with the findings of an EY report commissioned by the opposing landlords that analyzed Central Walk’s business plan.
First, it said Liu’s company was being far too optimistic about sales and profits, assuming it would do better than Hudson’s Bay right from day one — something the report called unrealistic. Second, it said the estimated operating costs were way too low, meaning the company was underestimating how expensive it would actually be to run the stores.
The EY report also pointed out that the company’s expected profits were wildly unrealistic, since Liu’s plan assumed the stores would earn 22 times or 2,201 per cent more profit than HBC did in 2024 — even though there would be relatively limited capital investment to improve the large store spaces, a smaller budget for acquiring inventory, and lower staffing levels than HBC.
The judge agreed with EY’s conclusion that the required timeline to open the stores is likely to be significantly longer, resulting in higher costs. Central Walk would need a much longer runway — both in terms of the timeline to grow in the market and gain more customers, and a much larger pile of available cash to burn in the red longer — to open the stores and eventually become profitable. There is a high risk that Liu would need hundreds of millions of dollars more than the budgeted $375 million.
“The projected financial results do not appear reasonable, and based on the experience of other retailers, including HBC, are at significant risk of being materially worse,” reads the ruling.
Citing EY’s findings, the judge found it problematic that even experienced retailers like Target, Nordstrom, and Simons took at least two years to open similar stores, and that was with proven operations, logistics, sales, and marketing systems, experienced leadership, and trained teams already in place.
The business plan assumes the new department store chain’s locations would operate more efficiently and cheaply than HBC had in those same spaces, which didn’t make sense for a brand-new company with no experience or infrastructure. On top of that, Liu claimed she could open 28 stores in less than a year, which the court said was impossible.
By comparison, when major retailers expanded into Canada, Target spent around $52 million per store and Nordstrom spent about $59 million, while Liu’s plan allowed for only $13.4 million per store — inclusive of construction, equipment, operations systems, marketing, and all other overall shared enterprise and location-based costs — with none of the brand power, logistics systems, or experience those companies had.
“I share the concerns of EY, particularly with respect to the Business Plan and its superficial, high-level approach. It clearly remains a work in progress, as is demonstrated by the admission of the Purchaser and the Applicants themselves that the original Business Plan (or Presentation) submitted in May 2025 was materially deficient in a number of respects. The amended Business Plan remains deficient,” reads the ruling.
Justice Osborne also agreed with the picture painted by a separate report by Revesco Properties, also commissioned by the opposing landlords. Revesco specializes in retailing, including implementing the real estate strategies of Nordstrom and Target across Canada.
The judge agreed with Revesco’s concerns that Central Walk’s limited experience managing just three malls and a golf course was insufficient. He also noted that there has never been a successful example of a retailer launching a large number of department store locations in Canada within 18 months, especially in major mall anchor spaces. The new department store would suffer from a complete lack of brand recognition, inadequate management experience, an untested distribution model, no evidence-based merchandising strategy, no market analysis, and a wide product range — from apparel and cosmetics to electronics — that “lacks a clearly defined customer.”
There was even a misunderstanding of what the new department store chain could legally bring into the former HBC store spaces, based on the leasing agreements.
In a previous court filing, it was noted that a meeting took place between Liu and Cadillac Fairview president and CEO Sal Iacono in early June. The purpose of the meeting was for Liu to present her business plan and financial projections for her proposed department store.
However, when the meeting began, Liu had no materials or a plan to show. Instead, she told Iacono to ask questions, and when asked for her business plan, she claimed she was “not allowed to share it” until Cadillac Fairview agreed to give her the leases.
During the conversation with Iacono, Liu said she would follow whatever the leases required but also described vague ideas for turning the stores into entertainment-focused spaces with playgrounds, flashing lights, and even food halls under the Eataly chain — half of which, she suggested, Cadillac Fairview should help pay for. Her ideas did not fit the existing rules of the leases, and she could not explain how they would work in practice. She also could not provide details on what her flagship stores would look like or any evidence that customers would actually want what she was proposing.
By the end of the brief 10-minute meeting, Cadillac Fairview executives concluded that Liu did not understand the leases, had no viable plan, and lacked experience running a department store. The meeting ended quickly — not because it was planned that way, but because there was simply nothing meaningful to discuss.
In the ruling, Justice Osborne agreed with the opposing landlords that it was necessary to have a suitable replacement anchor tenant for the former HBC spaces.
HBC had been an anchor tenant at these malls, meaning it was one of the largest and most important stores — helping to draw in shoppers and define the mall’s overall character. The opposing landlords explained that anchor tenants are crucial to a mall’s success because they attract foot traffic and encourage other popular retailers to rent smaller spaces nearby.
If the anchor store changes or fails, it can create a negative ripple effect, reducing customer visits and hurting the performance of other stores.
The opposing landlords argued that letting Liu’s company take over the leases would do more harm than good. They said it could lead to lower rents, falling property values, difficulty finding and keeping quality tenants, and long-term damage to the mall’s reputation and financial health.
In the view of the opposing landlords, it would be better to leave the spaces empty temporarily than to lease them to a tenant they believed would fail and destabilize the malls.
The poor quality of Liu’s business plan, the court found, stemmed largely from the lack of an experienced leadership team capable of developing and executing a viable retail strategy. Justice Osborne noted that this absence of expertise “gives me significant concern.”
“I recognize that the Purchaser and its principals do have significant experience owning three shopping centres in British Columbia. While that experience includes, as they submit, successful efforts to improve the retail experience at those properties, it comes from the perspective of a landlord and not that of a department store operator,” reads the ruling.
The proposed leadership team for Liu’s new department store chain mostly consisted of people from her other companies, none of whom had experience running retail operations.
Although Liu had said she planned to hire some former HBC executives to help launch the stores, those hires never actually happened — there were no signed contracts or confirmed commitments.
The judge agreed that hiring former HBC staff could have been a smart move, since they knew the business and the store locations well. But Liu admitted under questioning that she had barely spoken with them and had no formal agreements in place. Her explanation — that she was waiting for the lease deal to be approved before finalizing contracts — did not convince the court.
The judge said that if Liu were serious about her plans, she could have signed short-term or conditional contracts to show real progress. In the end, there was no evidence that she had any experienced team ready to manage over two dozen stores, which the court viewed as a major red flag.
Justice Osborne also identified some highly questionable hires to plan, launch, and lead the major enterprise.
According to the ruling, the CEO was appointed in May 2025, with her most recent experience being a residential real estate broker with no experience in retail or department store management. As recently as late May 2025, her email signature describes her as the “Assistant to Ms. Liu.”
The Chief Human Resources Officer was also an executive assistant with Central Walk. Prior to joining the company, she was a childcare worker.
There was one notable instance of Central Walk pursuing a former HBC executive — but it was anything but positive and productive. The judge pointed out that it was a troubling incident involving Wayne Drummond, a former president of HBC, and it showed how unreliable Liu’s company’s claims were.
According to the ruling, the opposing landlords had been told that Drummond had joined Liu’s new retail venture in a senior role, and his supposed involvement was used to give credibility to the project. However, court evidence showed that Drummond was actually hired for only one day — just to attend a meeting with landlords — and was paid $3,000 for a few hours of work.
When he declined to attend a media event without knowing the full details of the project or having a proper contract, Central Walk immediately cut ties with him.
Later, Drummond discovered that media outlets were reporting that he was helping run Liu’s new company, which was false. He wrote to Liu’s team demanding they stop using his name, saying he had no real connection or role in the business. Justice Osborne described this episode as “startling,” especially since Liu’s company was claiming to be a serious, well-organized entity ready to invest hundreds of millions of dollars. The fact that none of this was disclosed to the court or landlords raised serious doubts about the company’s honesty and professionalism.
As previously reported by Daily Hive Urbanized, over the summer, there were instances when Liu showed up to court without legal representation, as she had fired her lawyer, prompting the judge to adjourn a hearing early.
In July, over the course of just two consecutive days, Liu sent two separate letters to Justice Osborne — one containing complaints and a personal appeal to approve the deal, and another offering a deeply personal account of her upbringing in China, portraying herself as a resilient and self-made businesswoman who had overcome extraordinary adversity.
“At this most critical moment, I feel compelled to write to you. On June 23, in the courtroom, the very first moment I saw you, I felt an unshakable belief that you were a person of justice and strength. Yet what I still cannot understand is this: among so many lawyers who would do anything for money, how do you remain so steadfast, so confident, so noble? You refuse to join their ranks, and yet you carry an optimism that seems untouched by their corruption,” wrote Liu in one of the letters, presumably through a Mandarin-to-English translator.
“How is it possible — to fully understand them and their schemes, to witness their performances day after day, and yet not lose your grace, your dignity, your quiet but commanding presence? Is this what I have read of in books — true nobility? 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 court subsequently warned that the two letters sent directly to the judge were “inappropriate” and constituted a breach of proper legal proceedings, and that any additional correspondence would be considered harassment.
Justice Osborne later decided that the accompanying documents in the letters — originally intended to be confidential by Liu — would be added to the evidence, made publicly accessible in the service list on the court-appointed monitor’s website, which likely further hindered her case.
Liu’s failed bid offers an unintentional, unfiltered glimpse into the inner workings of both her company and the commercial real estate world.
What began as a bold attempt to reinvent the department store model has instead exposed serious shortcomings on the national stage — from questionable financing and leadership gaps to a fundamental misunderstanding of how the Canadian retail property market operates.
In some ways, Liu’s pursuit has become a case study in how not to approach a complex, high-stakes transaction, revealing just how intertwined — and unforgiving — Canada’s real estate industry can be.
The ruling closes one long, eventful chapter in HBC’s ongoing restructuring saga without any meaningful progress towards the disposal of real estate assets. It leaves open a much larger question: what comes next for the dozens of vacant anchor spaces once occupied by Canada’s oldest and most iconic retailer?
The uncertainty is further compounded by the lingering vacancies left behind by other failed department store chains, including Nordstrom and Sears Canada.
