Selection Group plays its last cards in hopes of controlling its turnaround by alleging that what is on the table gives too much power to the controller of the banking syndicate. The lenders retort that we can no longer wait to ensure that services are maintained in the residences for seniors (RPA) of the insolvent company.
The company, which owes 272 million to its bankers, went from words to deeds, Tuesday, by filing a request for permission to appeal the decision rendered the day before by judge Michel Pinsonnault so that it is suspended. The magistrate of the Superior Court of Quebec had decided in favor of the proposal of the creditors of Sélection, under the protection of the Companies Creditors Arrangement Act (CCAA) since November 14.
Sélection was quick to point out that it intended to turn to the Quebec Court of Appeal. In his 23-page motion, the RPA owner and manager identifies five areas where he believes the trial court erred. According to his lawyers, Judge Pinsonnault’s orders go against the “fundamental objectives” of the CCAA, in particular by entrusting powers to a controller who can decide everything at Selection.
The orders far exceed what is reasonably necessary to avoid the immediate liquidation of an insolvent company. On the contrary, these orders allow de facto a final receivership and the setting in motion of such a liquidation – which the CCAA is specifically intended to prevent.
Excerpt from the request
A special case
Judge Pinsonnault’s decision to retain PricewaterhouseCoopers (PwC), the controller of the banking syndicate, is not trivial. Barring exceptional circumstances, the choice of monitor proposed by the company seeking CCAA protection is usually confirmed by the court. The Selection folder is therefore one of the exceptions to the rule.
In this case, Sélection and its creditors are vying for control of the financial recovery that must be carried out under the CCAA. Creditors say they have lost confidence in the RPA giant – now insolvent – and its president and founder Réal Bouclin. Selection lenders want to see PwC in charge while the company prefers FTI and Yannick Blanchard as head of restructuring.
Selection’s lawyers criticize the impartiality and independence of PwC, pointing out that the firm represents the interests of a particular group – the lenders – for whom it has already acted in the past. In his decision on Monday, Judge Pinsonnault said he did not share this opinion, since the controller will have to submit his recommendations to the court for them to be ratified. The latter will therefore, “as far as possible”, put forward a restructuring plan which will obtain “the support of the management of Selection and other stakeholders”, wrote the magistrate on Monday.
In their response, the bankers of the owner and operator of RPA retort that we no longer have the luxury of waiting. Selection needs the interim financing of 20 million to ensure the maintenance of its activities.
“The appeal would deprive (Selection) of access to interim funding put in place under the order, urgently needed to maintain and stabilize Selection’s activities for the benefit of seniors and other stakeholders”, they argue. .
The banking syndicate also argues that the only “true beneficiary of the proposed appeal would be the ultimate shareholder” of the company, Mr. Bouclin. He adds that the businessman however has “no longer any economic interest” in the case because of Selection’s insolvency.
A quick decision
The hearing on this request to appeal from Sélection is scheduled for Thursday. If the Court of Appeal agrees to hear the company’s appeal, there will be further hearings on the merits thereafter. If the court refuses, the content of Judge Pinsonnault’s order will take precedence.
Meanwhile, through a missive sent Monday, Selection reiterated to its residents that there will be “no change to the services usually offered” during the judicial restructuring.
“Note that it is mainly the construction, development and certain management companies that are concerned by this process, and not the operation of the residences and complexes, it is written. Moreover, the court has repeatedly expressed that the process must absolutely put your well-being at the top of the priorities. »
Selection operates 48 RPAs. There are some 14,000 occupants in its residences and apartment towers.
With André Dubuc and Martin Vallières, The Press
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Source: SELECTION GROUP