Hudson’s Bay Co. ’s efforts to sell 25 of its leases to British Columbia-based billionaire

Ruby Liu for about $69 million were blocked by an Ontario court, according to a court filing.

HBC inked a deal to sell its leases to Liu in May, but the agreement faced opposition from several retail landlords, including Ivanhoé Cambridge Inc. and

Cadillac Fairview Corp. Ltd. , that doubted her business plan and ability to run the stores, and the matter was taken to court in late August.

Almost two months later, Justice Peter Osborne of the Ontario Superior Court of Justice agreed with several of the concerns raised by the landlords.

“The overall lack of experience at the leadership level represents a significant risk to the operational viability of launching and managing 25 large department stores in the contemplated timeline,” he said in his 48-page decision released Friday. “The composition of the proposed senior leadership team for the purchaser … gives me significant concern.”

HBC, Canada’s oldest retailer, which filed for bankruptcy protection under the Companies’ Creditors Arrangement Act in March, is trying to pay back millions of dollars to its creditors.

Aside from monetizing its leases, HBC also laid off all its employees, sold intellectual property rights to

Canadian Tire Corp. Ltd. and is still trying to auction off its artifacts. The sale of the 25 leases to Liu could have led to a recovery of more than $50 million for HBC’s creditors and created about 1,800 jobs across Canada, according to a court document filed by HBC.

HBC has not responded to the Ontario court’s decision, but it is a blow for Liu, who had already organized a couple of recruitment events in July to hire workers for her proposed stores.

Back then, Liu outlined her plans to create a new set of stores under her name. These stores would dedicate about 30,000 square feet for a kids’ play area, she said, and would include Asian supermarkets and Asian-fusion dining areas.

She also wanted to open seven to eight “platinum stores” that would have focused on an “immersive shopping experience” to attract younger shoppers.

“In two or three years, you will see new Ruby Liu stores in Canada,” she said at the time. “If we are successful, in five years, we are going to go to other countries in North America and the rest of the world. We are planning to build 30 stores worldwide if we are successful.”

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Lawyers representing the landlords said in August that her plan was “doomed to fail.”

One lawyer told the court that it was far less damaging to landlords and other tenants in a shopping mall to have a vacant space than to have an “unsuitable, inappropriate anchor tenant.”