Central Market | Cinema Guzzo threatened with expulsion

The “Barbenheimer” phenomenon did not succeed in sufficiently replenishing the coffers of the Cinémas Guzzo Central Market Mega-Plex, contributing to souring its relations with its lessor. Exasperated, the owner of the premises is demanding 1.8 million from the Quebec channel and asking the courts to give him the right to evict him.

This is according to an amended motion filed last week by the real estate arm of the British Columbia Investment Management Corporation (bcIMC) – a pension plan manager – with the Superior Court of Quebec. The legal dispute lifts the veil on a business relationship which has greatly soured. While the British Columbian institution accuses its tenant of being a bad payer and of not having enough money in its bank accounts, Cinémas Guzzo accuses it of having a “disconnect with the cinema industry “.

“They can claim whatever they want, they were paid,” bluntly states the president and CEO of the family business, Vincent Guzzo, in a telephone interview with The Presswhere he commented on the case even if it is still in court.

The plaintiff’s allegations have not yet been proven in court and her lawyers have not returned our calls.

According to bcIMC, its business relationship with the big boss of Cinémas Guzzo was solid before the arrival of COVID-19. It’s the pandemic that seems to have turned everything upside down. Since then, the company has been accumulating late payments, signing bad checks and failing to include interest when it is able to make a payment.

The businessman admits, however, that the screenwriters’ strike combined with that of actors in Hollywood last fall, which postponed the release of numerous American films, harmed the profitability of his Central Market cinema, “who lives on American products”. Then he adds that he only asked for a little leeway from the bcIMC real estate subsidiary.

“The benefit we wanted was to be able to pay the rent during the month and not on the 1st^er of the month. Sometimes we’re tight. There is nothing abnormal in what I asked, he maintains. In general, property owners have understood that it is better to be late in rent than not to have rent. [du tout]. »

“Sometimes you have to choose what is most important. Is it really important to pay rent on the 1st^er of the month when this cinema is losing money? Shouldn’t I pay suppliers? »

A virus that changes everything

Backtracking. Cinémas Guzzo moved to Marché Central in 2004 by signing a lease for an initial period of 10 years. The latter has been renegotiated and renewed numerous times over time. The current deadline is scheduled for 2035 – which clearly no longer suits the owner of the premises.

Everything changes with the pandemic. In order to restore oxygen to the Quebec chain, which has suffered greatly from health restrictions having caused temporary closures of its theaters in addition to capping capacity at times, the lease is restructured twice, in 2021 and in 2022.

“However, notwithstanding the terms of the lease […] the tenant refuses or neglects to respect its freely negotiated and agreed obligations,” alleges bcIMC’s motion.

Cinémas Guzzo accumulated significant delays when its owner turned to the Superior Court of Quebec on January 31, 2023. The “arrears” are “substantial” and exceed 30 months. They go back to 1^er March 2020, according to the content of the motion instituting proceedings, which aims to force the Quebec company to pay the overdue amounts.

Even if an “agreement in principle” occurs between the two parties after the start of the legal process, Cinémas Guzzo is still unable to meet its obligations. Its financial reserves would then be insufficient.

“During the months of September and October 2023, certain checks sent by the tenant for payment of rent cannot be cashed due to insufficient funds,” says bcIMC.

The complainant makes several criticisms of Cinémas Guzzo. In addition to payments that fail due to bounced checks, other payments, when the company is able to make them, do not include interest payable due to delays. The patience of the lessor of the Méga-Plex Marché Central reached its limits on January 26. It was at this time that she requested a seizure of her tenant’s property, including one of her bank accounts, in the hope of recovering what she was owed. Cinema Guzzo escapes this at the last minute.

At the last minute, the Quebec businessman and his first vice-president, Ilario Maiolo, managed to come to an agreement with the bailiff. In exchange, the cinema owner ends up paying three months of rent, i.e. for the months from November 2023 to last January.

Another twist awaits the owner of the Central Market. On February 19, Cinémas Guzzo gave him six checks to pay different months of rent. A week later, the company informed bcIMC not to collect them due to “insufficient funds”.

The last few months seem to have been the straw that broke the camel’s back. It is in her amended motion that the plaintiff requests the termination of Guzzo’s lease at Marché Central in addition to asking the court to order her tenant to pay her the equivalent of 1.8 million for the outstanding arrears.

Difficult in Montreal

“Their new way of acting with us is: every time we are late on the month’s rent, they ask for a cancellation of the lease,” maintains Vincent Guzzo.

Although he assures that his company is not in financial difficulty, he recognizes that his three establishments located on the island of Montreal are less profitable than the others. High property taxes, a strike by Hollywood screenwriters and actors preventing the release of American films – even more popular in the Montreal market – are all factors he cited to explain the situation. The businessman also ensures that he maintains good relations with all his landlords… except at the Central Market.

“If they want us to leave, we will leave,” he says when asked about the request to terminate the lease.

What does he expect next? ” I’ve no idea. »