""There is an apparent lack of commercial soundness to this arrangement that, at the very least, makes it difficult for the court to afford deference" to those wanting to sell the Yorkdale Hudson's Bay Company (HBC) lease to Fairweather Ltd., she wrote. That takeover plan was initially put forward last year by FTI Consulting Canada Inc., which is now overseeing a joint venture HBC and RioCan Real Estate Investment Trust had for 12 properties, including the three-floor former HBC space at Yorkdale."
"FTI and RioCan saw the lease transfer as a chance to lessen the blow caused when the department store filed for creditor protection last March, leading the joint venture to be placed into receivership in June. Receivership is a legal process where a neutral third party in this case, FTI is appointed by a court to take control of a distressed company in order to recover amounts owing to creditors."
"Oxford opposed FTI and RioCan's plan, saying Les Ailes de la Mode was not suitable for its luxury mall. It maintained the company is "not a financially healthy retailer" and its stores "look and feel temporary and down-market," which is the antithesis of the posh vibe Yorkdale projects."
Judge Jessica Kimmel blocked Les Ailes de la Mode, owned by Fairweather Ltd., from taking over the former Hudson's Bay store at Yorkdale Shopping Centre. FTI Consulting Canada initially proposed the takeover while overseeing a joint venture between HBC and RioCan for 12 properties after HBC filed for creditor protection. FTI and RioCan sought a lease transfer to reduce losses; the joint venture entered receivership in June. RioCan holds a $75-million mortgage on the HBC lease and faces a significant hit if a new tenant is not found by August, when ownership could revert to Oxford Properties. Oxford opposed the transfer, calling Les Ailes de la Mode financially weak and incompatible with Yorkdale's luxury image.
Read at www.cbc.ca
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