Acquisition of Just for Laughs | “ComediHa!” does not intend to retain the majority of employees”

Most Just for Laughs Group (JPR) employees will have to mourn the loss of their livelihood: ComediHa! does not intend to welcome them after completing the purchase of the fallen comedy giant.

This is one of the findings of the most recent report prepared by controller Christian Bourque, of the firm PwC, responsible for the judicial restructuring of JPR. The document also confirms – as The Press revealed it on Tuesday – that it was the offer from the company established in Quebec which was accepted.

“The controller understands that ComediHa! does not intend to retain the majority of the debtors’ employees given that it already operates in the same sphere of activities,” writes Mr. Bourque in the document of approximately 20 pages.

Turning towards the Companies’ Creditors Arrangement Act (LACC), JPR had laid off 70 employees, or approximately 75% of its workforce. Everything indicates that they will have to find work elsewhere. The same goes for employees who have remained on the job since March 5, when the humor specialist filed for bankruptcy.

Laid-off employees will have to turn to the Employee Protection Program (PPS) – which provides for the payment of unpaid eligible wages to people whose employer is in bankruptcy – to obtain the amounts owed to them. Since JPR had debts of around 50 million at the time of taking shelter from its creditors, everything indicates that only crumbs will remain for the employees.

“Given the nature and value of secured and unsecured claims, in the absence of the PPS, there may be little or no funds available for distribution to terminated employees,” notes Mr. Bourque.

They had already expressed their dissatisfaction earlier this month. On May 9, through a lawyer, JPR employees contacted the lawyers of the parties involved in the case to try to obtain their end-of-employment benefits more quickly under the PPS.

In a letter, they stressed that the end of their employment seemed inevitable given that the suitors for JPR were well-established players who did not need more employees. Since they had been laid off, their employment relationship with JPR was maintained, which prevented them from receiving their compensation.

More than 20 million

The price offered by ComediHa! – which counts Quebecor as a minority shareholder – is not revealed in the controller’s report. According to documents prepared by PwC, the brand value of JPR was 20 million in 2022. It is reasonable to believe that the price of the transaction is higher.

Brands, festivals, tours as well as everything related to television production will find themselves in the hands of ComediHa! The group will also obtain the catalogs of JPR, where we find the popular show The gagsbroadcast in more than 50 countries.

PwC had invited five groups to submit a bid for JPR.

ComediHa!, the tandem of Cirque du Soleil and KOTV and the Entourage Group were the Quebec options. There were also two Toronto players specializing in television and film production: New Metric Media and Vortex Media.

Only three of the qualified groups submitted bids.

Head office sold

PwC also received an offer for the building that housed JPR’s head office, located on Saint-Laurent Boulevard in downtown Montreal. On the Montreal assessment roll, the property is close to 5 million.

“The transaction, combined with the sale of the property, generates sufficient realization to repay the secured creditors in full and will allow for distribution to unsecured creditors,” the controller wrote.

This means that the National Bank (17 million), the Cultural Business Development Corporation (2.5 million) and the Business Development Bank of Canada (1.9 million) should get their money back.

Mr. Bourque will present his recommendations to Judge David R. Collier, of the Superior Court of Quebec, who is overseeing the process, next Monday. The magistrate must give the green light to what is on the table.

The controller warns that the transaction will take time to conclude due to the diversity of assets purchased by ComediHa!. In this context, he asks Judge Collier to extend until August 30 the period during which JPR remains sheltered from its creditors.