wants to appoint a legal representative and create a “hardship fund” to
, as
Canada’s oldest department store
gradually closes its shops and
in the coming weeks as it tries to pay back about $1 billion to its creditors.
The company, which employs more than 9,000 people, has sent termination letters to 272 corporate employees and anticipates further reductions, it said in a court document dated April 17.
Most employees won’t receive severance payments, but workers may get money through the federal Wage Earner Protection Program Act or if HBC manages to recover a “sufficient” amount of money to pay back its unsecured creditors, the document said.
To “alleviate some of the difficulties associated with the termination of certain benefits,” HBC is in talks with a two lenders to start a hardship fund that can provide financial assistance to its current and former employees, it said.
HBC is also seeking court approval to appoint Toronto-based law firm Ursel Phillips Fellows Hopkinson LLP as a legal representative to support the interests of both its current and former employees, which would “contribute to overall cost savings” and streamlining by “serving as a single point of contact” between employees, HBC and the court, the company said.
Hiring a legal representative for employees during complicated restructurings is a common practice. HBC’s proposed law firm has previously represented workers at Nordstrom Canada, Sears Canada Inc. and Air Canada.
“Ursel Phillips Fellows Hopkinson LLP has extensive experience representing large groups of employees and former employees in matters involving employment-based claims,” HBC chief financial officer Jennifer Bewley said in the court document.
HBC is also trying to get its proposal to sell its artifacts through a separate auction approved.
The company’s collection has more than 1,700 pieces of art and more than 2,700 artifacts that “
reflect the rich heritage and cultural legacy of the company
,” it said. Among them is the Royal Charter, a document that gave the company exclusive trading rights over a portion of Canada in 1670.
A separate auction would make the sale of the art collection more transparent and help ensure that “all laws and regulations in respect of Canadian heritage and cultural property are adhered to,” Adam Zalev, cofounder of Reflect Advisors LLC, HBC’s financial adviser, said in the court document.
Several parties, such as government institutions, museums, universities and high-net-worth individuals, have expressed interest in HBC’s art collection, he said. Some have also asked that the art collection be made available for public viewing in a museum or other public institution. The auction is expected to take place before June 30.
Even so, some historians and analysts are concerned that Canadian organizations may not be able to afford these culturally significant artifacts and that they may end up going abroad.
“(The Royal Charter) is an object of national significance, so it would be nice if it could be acquired by a public collection,” Carl Benn, a history professor at Toronto Metropolitan University who previously worked at museums for more than three decades, said. “Although the cost might be prohibitive.”
He said a big issue in Canada is that most public museums and archives don’t have enough money to go after the things they should be going after.
“It would be best if (HBC) actually just donated the charter to Library Archives Canada,” he said. “But I can understand how the legalities and the context of the company going bankrupt are leading it to send something to auction.”
Benn said there are laws that prevent the export of such valuable artifacts for a certain period of time in case a foreign buyer purchases it, but he hopes a major Canadian institution can buy it.
Retail analyst Bruce Winder said HBC’s auction would be a unique event in the retail sector, so it will be “interesting” to see how it plays out.
“There’s going to be some sensitivity around it because these artifacts are going to be seen as very Canadian,” he said. “There’s going to be some public scrutiny about who buys the artifacts and whether they remain in Canada.”
Separately, Patrick Shea, a lawyer at Gowling WLG (Canada) LLP and a former member of the Canadian Forces, along with a group of businesspeople and former members of the military, is trying to ensure that Second World War memorials at HBC stores in downtown Calgary and Toronto are protected.
“I am concerned that they may get lost in the shuffle because they have no economic value,” he said of the plaques that combined have the names of about 100 young men who were killed during the war. “I have written to the Hudson Bay, asking them to preserve the memorials and to ensure that they end up in a proper place.”
• Email: nkarim@postmedia.com
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