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The lender argues efforts to get landlords opposing the deal on board with it have so far proven costly and unsuccessful, thus minimizing how much it will be able to recover from the collapsed retailer.

To aid in the Bay’s wind down, Restore wants the court to appoint a “super monitor” to subject the department store chain to even more oversight.

If the court doesn’t agree to a “super monitor” arrangement, Restore suggests appointing Richter Consulting Inc. as a receiver. 

The Bay said it doesn’t need more oversight because it’s properly governed. It maintains the Liu deal is the best shot it has at recovering more cash for creditors.

Pathlight Capital LP, one of the Bay’s other lenders, supports the Liu deal.

In a filing made just before court began Tuesday, the lender argued “there is no reason to prematurely terminate” the transaction and “eliminate the prospect of significant additional funds being realized by the estate.”

Yet Alvarez & Marsal, the monitor previously appointed to guide the court process, said in its own overnight filing that it has written to Liu several times reminding her of her obligations and asking for information that could be used to get the court to assign her the leases even without landlord approval.

The monitor said Liu has not meaningfully responded, provided landlords with more information that could get them onside or even taken the most basic and necessary steps to advance her bid.

Liu has previously said she’s provided landlords with information about her plans to build a department store in their properties and believes they will welcome her if a court assigns her the leases.

The monitor said pursuing approvals for the deal reached in March is costing at least $4.7 million in rent, property taxes, utilities and other fees each month and eroding Restore’s collateral.

While it didn’t strongly advocate for more oversight, the monitor said it may be appropriate at some point during the Bay’s creditor protection proceedings and it’s prepared to step up, when necessary.

The monitor’s report also revealed the Bay has several other lease deals in the works.

One has been reached with a landlord wanting to buy its own lease for less than $250,000.

A second is with an unnamed third-party who wants up to eight leases in Ontario, Alberta, Saskatchewan and Manitoba. One lease was removed from the transaction but landlord approvals are still being sought.

This report by The Canadian Press was first published July 15, 2025.