Hudson's Bay looks to auction off royal charter that launched company 355 years ago

Hudson's Bay has asked a court to allow it to put the royal charter that launched the company 355 years ago on the auction block, along with its trove of art and historical artifacts.

The collapsing department store chain known as Canada's oldest company filed a motion with the Ontario Superior Court of Justice late Thursday asking for permission to sell 1,700 pieces of art and more than 2,700 artifacts.

The company has been seeking buyers for the items since last month but now wants to pull the art and artifacts from that process to ensure they get "care, consideration and expertise required" and "can be fully prioritized through a separate process facilitated by a fine art auction house."

Court documents say the move was prompted in part by "government and quasi-government institutions, museums, universities, and high net worth individuals acting on their own accord or as potential benefactors to certain Canadian museums and institutions."

They have expressed interest in the art collection but also told the company they want the items to be made available for public viewing in a museum or other institution, said Adam Zalev, managing director of Hudson's Bay's financial advisor Reflect Advisors, in an affidavit filed Thursday.

A separate auction "is the most transparent, fair and efficient approach to monetize the art collection while recognizing and protecting its cultural and historical significance and ensuring compliance with any applicable legislation," he said.

His affidavit and the company's motion don't detail the full extent of the treasures that may be sold but a source familiar with the auction process, who was not authorized to speak publicly, said the art is mostly paintings, some of which date back as far as 1650.

The artifacts include point blankets, paper documents and even collectible Barbie dolls.

Hudson's Bay has said one of the items on the auction block is the charter it was granted by King Charles II in 1670.

In addition to establishing Hudson's Bay as a fur trading company, the document gave the business rights to a vast swath of land spanning most of the country and extraordinary power over trade and Indigenous relations for decades more.

"It's 100 per cent their crown jewel. There is no doubt this is the most significant document that the Hudson's Bay Company has access to or that they've ever produced," said Cody Groat, a historian of Canadian and Indigenous history who serves as the chair of the UNESCO Memory of the World Advisory Committee.

"Of course, there's other documents we can think of that speak to relationships with Indigenous peoples, business ventures and there's also hints of slavery in the Hudson's Bay Company archives, which are quite significant ... but this is the core."

Groat had heard of efforts in recent days to encourage Hudson's Bay to keep the charter from being auctioned off and instead donated somewhere like the Archives of Manitoba, which already serves as a custodian to some of the company's artifacts.

With that advice going unheeded, he now expects there to be interest in getting the document a UNESCO Memory of the World distinction, which is meant to safeguard documents of historical and cultural importance.

Other Hudson's Bay artifacts donated to the Archives of Manitoba got the recognition in 2007, but the charter escaped that status because the company held onto it.

The recognition does not prevent the artifacts from being destroyed or sold but applies a social pressure that helps preserve them, Groat said.

"There is zero legislative mechanism in the country to keep this charter out of private hands at this point in time," he said, though Canada has cultural export policies that can delay a sale to a foreign buyer.

He suspects anyone wanting to buy the document would need deep pockets, making it difficult for "chronically underfunded" archival institutions to place bids. Indigenous communities may also be hampered because they have no archival instruction unifying them all, Groat said.

Winnipeg has a long connection with the company, whose first retail department store opened in the city in 1881 at the corner of Main Street and York Avenue.

In 1970, on the 300th birthday of the company — which shortened its name from the Hudson's Bay Company to the Bay in 1964 — head office functions were transferred from London, England, to Winnipeg.

As the company expanded into the east, head office functions were later moved to Toronto.

The Manitoba Archives building on Vaughan Street sits across from the now-vacant downtown HBC. The records cover HBC history from the founding of the company in 1670, including business transactions, medical records, personal journals of officials, inventories and company reports.

Anyone who buys the charter, which comes with its red wax seal, will own the "Holy Grail," said Mark Garner, who runs a Hamilton, Ont., museum dedicated to Hudson's Bay's 19th century steamship, the S.S. Beaver.

"That's a very important piece of paper. In the United States, that would be like the Declaration of Independence," he said. "That's what our history is made from."

Garner owns hundreds of pieces connected to the Bay and the Beaver.

It ran aground at Prospect Point in B.C. in 1888 and sat there for four years, being pillaged of its wood and other mementos, until it sank in 1892. Garner developed an interest in the ship because a relative, Charles McCain, got the salvage rights to the boat and melted down its metal to create commemorative medals.

Garner believes the Bay's collection may contain pelts from the company's earliest days along with wood from the Beaver and captain's logbooks that used to be displayed in store windows in the 1890s.

"There could be some very valuable pieces, some of which I've been searching for 20 years and unable to find," he said.

The Bay hasn't said how much it hopes to raise from the auction, which will be run separate from processes underway to uncover buyers for its licenses, brands and takers for its leases.

Court documents say the art sales process will likely be run by one of three unnamed but "leading art auction houses in North America" it has had "active discussions with."

The sale is necessary because the retailer owes millions to creditors. It filed for creditor protection last month, leading to the liquidation of 74 Bay, two Saks Fifth Avenue and 13 Saks Off 5th stores. Six stores remain open but are seeking a long-term lifeline.

Sales of art and artifacts could appease creditors and prolong those six stores' run, but Garner worries they may also lead to history in long-term storage or on a millionaire's wall.

"It just concerns me that a lot of these historic value items might disappear from sight," he said.

In addition to asking for permission to run an auction, Thursday's court filings reveal Hudson's Bay is exploring the possible implementation of a "hardship fund" to "provide monetary assistance to current and former employees who are experiencing financial difficulty after the loss of their benefits."

An affidavit from chief financial officer Jennifer Bewley said it issued termination letters to 179 corporate employees on April 2 and another 93 on April 8.

She also said some 304 former and current employees enrolled in a supplementary executive retirement plan had their payments terminated and Hudson's Bay anticipates "further headcount reductions as a result of store closures over the coming weeks."