A year after being robbed of nearly $814,000 last year following a classic email fraud, Just for Laughs Group (JPR) is finally starting to get its money back – a process that has set the table for a dispute between the humor giant and its lawyers.
A first recovery of $352,224 took place last March, reveals the most recent report from trustee Christian Bourque, of the PwC firm. The latter oversees the sales process of the company, which still benefits from the protection of the Companies’ Creditors Arrangement Act (LACC).
However, an amount of approximately $66,000 has been deducted from the payment by Blakes, the law firm responsible for the file for JPR, as “unpaid fees” since last October. According to the controller, Blakes was not entitled to this “compensation” since JPR is insolvent and immune from its creditors.
The law firm doesn’t see things the same way. He claims to have recovered the money on March 4, before the humor specialist filed for bankruptcy. Blakes refuses to return this sum to PwC.
“Discussions are still underway regarding this compensation,” writes Mr. Bourque in his report.
The Press recently lifted the veil on the fraud that caused JPR to lose hundreds of thousands of dollars from February to April 20231. The subterfuge used is based on the usurpation of the email of a company director, manager or key supplier.
In the case of the fallen comedy giant, the unknown fraudster imitated emails from employees of L’Équipe Spectra and Groupe CH (spoofing, in English). JPR subcontracted management services to Spectra and evenko. These two companies are controlled by the CH Group.
The scheme resulted in three payments, which totaled $813,657, to the fraudsters.
“The fraud, committed by imitating the email addresses of certain employees of a supplier known to the group, had directed the funds to TD Bank bank accounts,” underlines Mr. Bourque.
JPR discovered the problem in May 2023 when the CH Group asked it if its management fees – one month overdue – would soon be paid.
Handful of finalists
On Monday, Mr. Bourque will appear before Judge David R. Collier, of the Superior Court of Quebec, to request an extension, until May 31, of the period during which JPR can benefit from the protection of the CCAA. This period will allow, according to the controller, to conclude the sale of the insolvent group and to “maximize the value” of other assets. JPR’s headquarters, located on Saint-Laurent Boulevard, is also to be sold as part of the process.
The controller’s report does not go into details of the group’s sale. No less than 15 potential buyers have signed confidentiality agreements since the beginning of March to have access to JPR’s books. Previously, PwC had contacted almost 130 potential buyers.
On April 15, after analyzing “different” proposals, the firm communicated “to a certain number of bidders” that they were moving to the next stage, the report explains. The document does not specify the number of finalists. The latter have until May 6 to submit a “final and binding” offer for JPR.
“Several information meetings were organized between PwC, representatives [de JPR] and bidders,” specifies the controller.
JPR has accumulated losses of around 12 million since it was owned by Bell (26%), Groupe CH (25%) and Creative Artist Agency (49%). In 2018, they bought the company from the hands of founder and former president Gilbert Rozon, who was tarnished by accusations of sexual misconduct. He has since been acquitted of criminal charges.
In an interview given to The Presshis first since the debacle of JPR, Mr. Rozon castigated the three shareholders of the group who, in his opinion, abandoned the humor specialist despite their “almost unlimited” financial resources.2.
With the collaboration of Hugo Joncas, The Press
1. Read “Just for Laughs Victim of Email Fraud”
2. Read “Gilbert Rozon castigates shareholders”