The Hudson’s Bay Company’s senior lenders want to terminate Ruby Liu’s proposed agreement to purchase 25 remaining leases from the iconic department-store chain.

ReStore Capital, which represents the lender group, has filed a motion asking an Ontario court to terminate the deal and appoint a new super-monitor. In the latter situation, ReStore wants the court to expand the responsibilities of existing court monitor Alvarez & Marsal.

“The current level of spending by HBC cannot be justified, and it is imperative that the costs of HBC’s wind down be more effectively managed by the monitor,” ReStore CEO Ian Fredericks wrote in an affidavit also filed with the court.

The leases cover former Bay stores in B.C., Alberta and Ontario.

ReStore contends that the Bay’s proposed deal with Liu is unlikely to receive landlord approval. Most of the landlords have advised the court, through Alvarez & Marsal, that they will oppose the proposed agreement and any action that forces them to accept it.

ReStore asserts that the Bay has made needless expenditures as it winds down, and “frittered away” cash provided to make debt payments. The expenses include $2.5 million in rent that the Bay is continuing to pay on the empty spaces to retain control over them, and another $7.5 million is due by August 15.

Although a liquidation sale generated $54 million more than expected, the lenders’ projected collateral shortfall has increased, according to ReStore. As a result, the lenders will be repaid at least $29 million less than expected.

Tiffany Bourré, a Bay spokeswoman, told The Globe and Mail that the company is continuing to manage the monetization of its assets “in a responsible and diligent manner.”

Fredericks described the Bay’s effort to obtain landlord approval of Liu’s deal “seemingly futile.”

Liu is seeking to acquire the leases to launch a new department-store chain bearing her name. She has already acquired three leases in B.C.

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