October 23, 2020
The pandemic has wreaked havoc on many industries, and as numbers in some regions skyrocket, brick and mortar retail stores continue to struggle to make full rent payments to landlords.
The Globe and Mail has detailed an ensuing law suit against Hudson’s Bay Co. from its landlords for outstanding rent since April for stores across B.C., Québec and Florida.
The piece notes that stores located within shopping malls are struggling to attract customers and that some of the biggest malls across Canada and the U.S. are receiving about “15 per cent of the rent at the worst parts of the crisis.”
Corporate Restructuring and Advisory practice head David Bish told The Globe that the pressure to make rent payments is a burden many retailers across the country are facing.
“There are countless tenants that have not paid or paid late or partially paid," David said.
David also noted that there is no set precedent that landlords and tenants can follow during these turbulent economic times.
"This is uncharted territory. People are making up a new playbook in this crisis. It is a concerted move and a strategic move to elect not to pay. It certainly suggests that there is a liquidity issue and that is not a surprise.”
Our team provides more expertise on corporate restructuring and advisory on the relevant practice page.