Hostilities resume between Groupe Sélection and its bankers

Hostilities resume between Groupe Sélection and its bankers. The latter are accused by the company of evading the option of its recovery in favor of its “pure and simple liquidation”. The magistrate who oversees this judicial restructuring did not remain indifferent after hearing the grievances of the fallen giant of seniors’ residences (RPA).

“You did not preach in the desert, agreed judge Michel Pinsonneault, Tuesday, after hearing Joseph Reynaud, the lawyer for Selection. We are entering the fifth month [du processus] and I hope that by the next hearing, I will be able to submit a clue […] regarding the recovery of your client. »

What was supposed to be a hearing to approve a transaction – the sale of a minority stake (5%) by Sélection in 11 RPAs held jointly with Blackstone – took an unusual turn when Mr.^e Reynaud strongly criticized the ways of his client’s creditors. The latter took shelter from its creditors last November.

In his opinion, the lenders of Sélection and their monitor PwC are not respecting the spirit of the initial order of Judge Pinsonneault, which provides that a “recovery plan” must be put in place “with the management team”. of the company founded by Réal Bouclin. Quite the opposite is happening, argued the lawyer.

According to him, the interim funding of 20 million – an amount expected to be increased later this month – is insufficient to ensure the continuation of certain activities of Selection while we refine a recovery strategy. For example, the lawyer pointed out, activities ceased on several construction sites in an effort to reduce expenses. The way things are, “by June 2023 there won’t be any [de division de] construction at Sélection”, worries the lawyer.

He also alleges that the directors of Sélection are not always adequately consulted by PwC, which constitutes a “major irritant”. M^e Reynaud notably argued that representatives of the RPA giant were not always present during “negotiation meetings with third parties”. Under these circumstances, it is difficult to prepare a recovery strategy, he believes.

Expected disagreements

As the comptroller plans to auction the company’s assets to bail out the coffers, the process is already meeting resistance. M^e Reynaud warned that his client risked “challenging certain orders which will be sought by the controller”, without offering further details.

“We don’t want to head straight for the liquidation of a company that was a flagship in Quebec and which today seems to be in the process of dismantling,” he told the magistrate. Sélection continues to believe that a recovery is possible and is working with its financial advisors to try to implement a recovery plan. You understand, Judge, that it’s not easy when you don’t have full control over the company. »

It will be necessary to wait before obtaining the version of the facts from controller Christian Bourque. He spoke to Judge Pinsonneault, stating that he “would have a lot to say about the remarks” of Selection’s lawyer before adding that some answers would appear in his next report which will be submitted to the court.

“I met with the company’s financial advisors and spent several working sessions with them,” he said. I even offered my modeling group. There is a piece that belongs to the debtor [Sélection] and this recovery plan must also be based on assumptions that take reality into account. »

Groupe Sélection also obtained temporary additional financing of 1.8 million in order to be able to “pay certain current expenses” in the 25 RPAs held in partnership with Revera. Some complexes are always in deficit. Calls for funds are still necessary to ensure the proper functioning of the residences.