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The properties were leased for millions of dollars each by HBC's Canadian arm starting in 2014 and 2015. 

They were operated by the HBC's U.S. subsidiaries until HBC Canada filed for creditor protection in March under the weight of more than $1 billion in debt. The retailer later closed all of its stores, including those under the Saks Canada banner, though Saks continues to operate in the U.S.

At issue now is an indemnity agreement — a legal contract that usually sees one party agree to cover potential financial losses or damages caused by another.

The retailer and landlord signed one of these agreements in June 2023, when HBC was seeking funding from landlords and lenders to shore up the business. Cadillac Fairview acquiesced with $200 million, court documents have shown.

The indemnity agreement was then amended on Dec. 23, 2024 because both sides agreed to release the U.S. part of HBC's business from the loan in exchange for HBC paying down about $24 million and converting some of its unsecured debt to secured debt. (Secured debt is backed by collateral, giving the lender the right to seize assets if the borrower defaults on the loan.)

In this case, HBC's U.S. arm indemnified Cadillac Fairview from any losses, costs or damages arising from a potential failure of HBC Canada or its U.S. arm to pay rent and other fees owed under its Saks leases.

As part of the deal, the retailer also agreed to punctually cover any rent and other payments due and meet "each and every" term laid out in the Saks leases, which included an obligation to maintain all the properties and keep them in a "good and substantial state of repair."

In a lawsuit filed in October, Cadilliac Fairview alleges the agreement fell apart in May, when HBC Canada told the landlord it would disclaim the three Saks leases in question within 30 days. 

A disclaimer is a legal mechanism that ends a lease before it expires — thus releasing the tenant from obligations like paying rent or maintaining the property.

When the retailer ceased operating stores at the properties in early June, Cadillac Fairview said it sent HBC's U.S. arm a letter demanding payments owing under the lease indemnity agreement.

The payments included more than $63.5 million in rent, more than $10.7 million in repair and maintenance costs and $300,000 in legal fees.

After the request was "ignored," Cadillac Fairview said it sent another demand letter in July that also went unanswered.

Its updated tally of how much HBC owes Cadillac Fairview now also includes $62,000 in chargebacks for utilities and other services and almost $347,600 in pre-filing tax arrears.

Cadillac Fairview, whose lawyers declined to comment because the matter is before the courts, said it also has the right to claim further losses, costs and damages.

HBC and Saks spokespeople, as well as their lawyers, did not immediately respond to a request for comment on the filing.

However, they said in a one-line court filing made last week that the company intends to defend itself.

When HBC shuttered in June, it left behind 80 stores and 16 more under the Saks banners. Many of the stores took up prime properties in Canada's biggest shopping districts and were covered by decades-long leases that granted HBC extraordinary rent concessions.

Court documents show HBC paid more than $3 million in annual taxes for its Sherway Gardens space, $2.3 million for the Chinook Centre store and $5.4 million for the Eaton Centre site.

Many of the properties HBC used were in need of major repairs to escalators, elevators, air conditioning systems and more when the retailer vacated them.

This report by ¹ú²úÓÕ»ó¸£Àû was first published Nov. 27, 2025.