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Invalid Checks and Unpaid Rents

HBC "is trying to use the pandemic as a pretext to unfairly enrich itself," argue the Galeries de la Capitale and Les Promenades Gatineau

Posted October 8, 2020 at 6:00 am.

Marie-Eve Fournier
La Presse

After sending bad checks to Galeries de la Capitale and Promenades Gatineau in April, Hudson & # 39; s Bay showed no signs of life, the manager of the two shopping centers said in a lawsuit. The six months of unpaid rent totaled more than $ 2 million.

The two shopping centers operated by the Oxford Company also asked the Superior Court to force Hudson & # 39; s Bay (HBC) to pay their September and October rents "within 48 hours". These warrants are expected to be heard next week, Oxford attorney Mark Meland of Fishman Flanz Meland Paquin told La Presse.

The appeal to the court would be justified by the fact that HBC "apparently has no intention of doing [payer ses loyers] in the foreseeable future".

According to Oxford, HBC does not pay its rent in 8 of the 11 centers. commercial under its responsibility. But the two lawsuits filed in Montreal in late September are the only ones in the country.

HBC is the largest tenant of the Galeries de la Capitale; his store covers 163,000 square feet. The monthly rent is $ 220,085 excluding taxes. The total amount of the claim is $ 1,413,405 (April to September). PHOTO EDOUARD PLANTE-FRÉCHETTE, LA PRESSE

HBC is the largest tenant of the Galeries de la Capitale; his store covers 163,000 square feet. Monthly rent is $ 220,085 excluding taxes.

At Promenades Gatineau, HBC pays rent of $ 145,943 per month. Thus, according to Oxford, the amount owed is $ 875,680.

A total of $ 2.29 million is claimed from Canada's oldest retailer. However, the amount will drop if the warrant is issued by the Superior Court, as HBC would then have to pay the September rent immediately, Meland said.

Arm wrestling

HBC declined to give us an interview on this topic. A spokesperson emailed us a statement saying the company is working with all of its donors "to amicably and logically share the losses from the pandemic."

Unfortunately, we could not come to a fair solution with Oxford. In this situation, we look forward to the legal system determining what is fair and reasonable for all parties.

From a statement by a HBC spokesperson

While acknowledging that the health crisis has affected retailers, Oxford instead believes that HBC "is trying to use the pandemic as a pretext to become unfairly rich at the expense of the owner "of shopping centers. And that the “real intention” of the retailer is not to pay rent “for as long as possible”.

Les Galeries de la Capitale is owned by the Ontario Municipal Employees Retirement Fund, OMERS, and the Canada Pension Plan (CPP Investment Board Real Estate Holdings). Les Promenades Gatineau is owned by OMERS and Montez Core Income Fund Limited Partnership, affiliated with a real estate investment company in Toronto.

"Frivolous complaints" and "dishonest attempt"

According to the two lawsuits filed by Oxford, HBC sent him checks for April's rent, but these were returned by the bank marked "NSF" as insufficient money.

In May, June, July, August and September, the Galeries de la Capitale and Les Promenades Gatineau would not have seen the color of any check from their largest tenant. And letters from Oxford would have gone unanswered.

The mall manager adds that "HBC, in a dishonest attempt to justify its continued violations, has launched frivolous and selfish complaints about the operations of Oxford's shopping centers." No example of a complaint is mentioned.

The lawsuits state that the retailer pays his rent in 3 of the 11 shopping centers operated by Oxford where he is a tenant. The choice not to issue checks at Galeries de la Capitale and Promenades Gatineau "thus seems purely tactical". Mr. Meland declined to elaborate on the claim.

For its part, HBC confirmed to us that it did not intend to close these two stores.

As far as the Quebec Retail Council (CQCD) is aware, no retailer in Quebec has been sued by a shopping center for unpaid rents since the start of the pandemic. However, some received notice of default and each lease required intensive negotiations with the landlords.

Written by Rahis

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