Financial meltdown | Quebec concerned about governance at Groupe Sélection

Quebec is questioning the governance practices at Groupe Sélection, which benefited from the support of Investissement Québec (IQ) before being insolvent. A helm is needed, says Economy Minister Pierre Fitzgibbon, without however going so far as to completely disavow the owner and manager of seniors’ residences (RPA).

“I do not favor the banks, nor Groupe Sélection, said the minister, Friday, on the sidelines of an event in Saint-Jérôme, in the Laurentians. It is not for the government to take a position. There is reason to ask questions about governance (of the company). There must be a restructuring, there is no doubt. »

The important thing, according to the principal concerned, is to ensure the maintenance of services in Sélection’s RPAs as well as the protection of the government debt.

Under the protection of Companies Creditors Arrangement Act (CCAA) since November 14, Selection has lost the confidence of its bankers, to whom it owes 272 million. Lenders also harshly criticized founder and president Réal Bouclin.

During the four days of hearings aimed at determining who would be in charge of the financial recovery, the company was also dumped by partners such as the Fonds de solidarité FTQ, Groupe Montoni and Revera. The various testimonies had notably lifted the veil on deficient financial management and liquidity problems that are not new.

Only the representative of IQ, the financial arm of the Quebec state, was more nuanced in refusing to take a position.

The Superior Court of Quebec had ruled by accepting the recovery proposal of the Selection bankers. Disagreeing, the company seeks leave to appeal alleging that what is on the table is a disguised liquidation. The Quebec Court of Appeal took the case under advisement on Thursday. It is not known when the court will make its decision.

Millions at stake

Quebec is exposed to the tune of 60 million to the debacle of Selection due to loan guarantees granted in the spring of 2021. Taxpayers could therefore lose money in the adventure. The minister does not regret that the company has benefited from the government’s pandemic aid programs.

Asked whether he would rather see the bankers of the RPA giant straighten out the company’s finances, Mr. Fitzgibbon did not want to decide, but nevertheless wanted to send a message.

Mr. Fitzgibbon did not advance on the improvements he wanted to see at Selection in terms of governance if Mr. Bouclin and his team win their case before the Court of Appeal. IQ has “levers” at its disposal to exert “some pressure”, he limited himself to saying.