A Crucial Step for Former Hudson’s Bay Employees: Legal Team Seeks Court Approval for Hardship Fund
TORONTO — In a significant move aimed at providing relief to laid-off Hudson’s Bay employees, their attorneys are urging a court to endorse two new initiatives designed to support those affected by the department store's closure.
On Wednesday, the legal team from Ursel Phillips Fellows Hopkinson LLP submitted a motion to the Ontario Superior Court, requesting approval for the establishment of a hardship fund intended to assist former staff grappling with financial challenges following the downfall of the iconic retailer. Additionally, they seek the court’s endorsement of an agreement that would benefit individuals reliant on long-term disability payments.
The proposed hardship fund is designed specifically for former Hudson’s Bay Company (HBC) employees and retirees who have struggled to manage essential expenses such as rent, mortgages, utility bills, car loans, and medical costs since the department store ceased operations last year.
Should the court give the green light to this fund, eligible workers would be able to receive one-time financial aid amounting to as much as $9,600, with those facing medical emergencies or other critical situations potentially qualifying for an additional $2,500.
The funding for this initiative is expected to come from three main sources: a Zellers health and welfare trust valued at approximately $9.9 million, an HBC reserve fund totaling around $1.6 million, and $250,000 that is currently available within the company’s finances.
The history of HBC’s ownership of Zellers dates back to 1978 when it acquired the discount department store, although the rights to the Zellers name have since been sold off.
In conjunction with the hardship fund, the lawyers are also seeking court approval for a lump-sum termination payment for former employees who were informed last June about the suspension of their long-term disability benefits.
After negotiations, the law firm believes that the proposed lump sum will sufficiently assist many beneficiaries until they reach the age of 65, thereby providing them with the financial stability and certainty needed to manage their economic situations effectively.
“This agreement will deliver crucial support to some of the most vulnerable employees impacted by this insolvency, particularly those unable to secure alternative employment due to their disabilities, who face imminent loss of their primary income,” stated attorney Susan Ursel in a press release.
When Hudson’s Bay, recognized as Canada’s oldest department store, sought creditor protection and shut down all its locations last year, it employed 9,364 individuals across 96 stores operating under the HBC and Saks brands, as well as in four distribution centers and at the corporate headquarters.
Currently, only eight employees remain with the retailer, which continues to navigate the process of winding down through the court system.
Since the collapse of HBC, Ursel Phillips Fellows Hopkinson LLP has reported that affected workers have encountered loss of income, benefits, severance pay, parental leave enhancements, and various other financial incentives.
Long-term disability plans covering approximately 188 employees and retirees were funded through HBC’s general revenues and managed by Manulife, according to court documents.
This report was originally published by The Canadian Press on February 4, 2026.
