Groupe Sélection and its president, Réal Bouclin, “do not have the means to match their ambitions” when they ask for more time to redress the insolvent company, decides the Superior Court of Quebec. The assets of the company must quickly be put up for auction in order to “ensure” its “survival”, considers the court.
Even if the approach suggested by the businessman is logical, the debt of the real estate developer and manager of residences for the elderly (RPA) is “excessive”, even “unsustainable”, writes judge Michel Pinsonnault, in his decision. delivered on Friday evening.
“If Mr. Bouclin wanted more time for [les enchères] to [déroulent] in more than two phases, it was his responsibility to provide the controller with the necessary tools allowing him to consider such a scenario considering the existing major financial constraints”, underlines the magistrate.
However, the president of Sélection still seems to be at the stage of talks with potential donors.
Sélection and its bankers agree that assets must be auctioned to finance the recovery of the company which has turned to Companies Creditors Arrangement Act (CCAA) last November. PwC, which acts as controller, intends to put all the buildings and land up for auction next week and transactions could be completed as early as July.
The RPA giant, which alleges that the auctions are only a disguised liquidation, asked that the process be staggered until February 2024. Mr. Bouclin even appeared before Judge Pinsonnault on Tuesday to plead his case. . It was the first time he had explained himself to the magistrate since his company had taken shelter from its creditors.
“A recovery plan can hardly be implemented before the company’s financial recovery has been successfully completed, especially in the case before us,” said the magistrate.
In the red
Despite the efforts to reduce expenses made by Christian Bourque – the head of restructuring – the monthly operating loss of Selection fluctuates between 7 and 9 million, recalls the decision. The deployment of the auction process was conditional on an additional financing of 20 million from Selection’s lenders.
Judge Pinsonnault also launches a new call for collaboration between the controller and Selection. A climate of mistrust has developed between the two parties, he laments.
There seems to be in Mr. Bouclin’s mind a misunderstanding […] [du] role of controller who always seems to be perceived as the henchman [des prêteurs] to whom he would respond first and foremost.
Judge Michel Pinsonnault, in his decision
He urges the two parties to communicate better. It also means that the businessman should be more involved in negotiations with the different parties. Mr. Bouclin hopes to be able to find a new financial partner to keep certain assets – in particular seven strategic sites for projects, including that of the former Molson brewery, in the east of downtown Montreal.
By email, Selection said “take note” of the judgment.
“We will continue to work together with all the parties involved and we remain aligned with our objective of joining forces with strategic partners who will allow us […] to carry out our revival. »
Working
According to the schedule in Judge Pinsonnault’s decision, the bidding process should begin next Tuesday.
The court also accepts the request of the monitor, who wanted the suspension of restrictive covenants in the context of the auction. This aroused discontent among certain creditor partners of Selection, who wanted to have a say in whether they were affected by a transaction.
According to PwC, this would have had a “devastating effect” on the auction since potential buyers could have been left on the sidelines without having a real “reasonable chance” of submitting a winning bid.
Learn more
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- April 28
- Date on which the first phase of the auction will end
SOURCE: pricewaterhousecoopers