Safe from creditors | The Just for Laughs Group subscribes to deficits

The Just for Laughs Group (JPR) has accumulated losses of around 12 million since Bell, the CH Group and an American agency became owners five years ago. Insolvent, the Quebec comedy giant nevertheless arouses interest, provided that its debt counters are reset to zero.

The three shareholders of JPR chose to carry out a leveraged acquisition (leveraged buyout) when buying the company from its founder and former president Gilbert Rozon, in 2018, for a sum of around 55 million. This means that the transaction was carried out by putting the group in debt.

“There was a fair amount of debt [au bilan] of the company from the very beginning, explained the group’s chief financial officer, Alain Boucher, before the Superior Court. Afterwards, with a period of pandemic, an events company that does not hold events is dramatic. »

The parties testified Friday before Judge David R. Collier, who accepted that the process now proceeds under the Companies’ Creditors Arrangement Act (LACC).

It was the first time that a senior executive from Just for Laughs had explained himself publicly since the group protected itself from its creditors on March 5.

Before the magistrate, Mr. Boucher, in office since 2020, explained that JPR’s debt gave it much narrower room for maneuver to deal with unforeseen events, such as a pandemic.

At the time of filing for bankruptcy, the company had debts totaling around 49 million. Some 22 million are guaranteed debts, and Mr. Rozon is still waiting to receive 15.6 million – a sum he risks losing.

Often in the red

Responsible for the legal restructuring of the humor specialist, Christian Bourque, of the PwC firm, for his part revealed that the financial challenges were not new. Essentially, JPR has been in deficit since it was owned by Bell (26%), Groupe CH (25%) and Creative Artists Agency (49%).

“Since 2018, this company has posted losses four out of five years,” he said. She lost almost 12 million during this period. It’s not in my report. The group’s only profitable year dates back to 2022.”

Mr. Bourque’s report notably highlighted that the company had presented a Just for Laughs festival last year on a scale comparable to that of the editions before the pandemic, even though it knew that the event would end in a loss. JPR sunk 2 million into the adventure.

Due to the current financial situation and the difficulties of recent years in terms of profitability, Mr. Bourque explained to the magistrate that a shareholder who injected money into the current structure would have little chance of “revisiting the color of his money “.

Although the investment solicitation and sale process – where the organization could be sold in one piece or in pieces – has just begun, Mr. Bourque stressed that there has already been “a lot approaches by potential investors”.

“Many stakeholders have positioned themselves in the last few days,” he told the magistrate. They are represented by major law firms, which signals that they are serious. I’m pretty sure the process will generate some excitement. »

The head of JPR’s restructuring, however, did not offer details on the sums that could be offered by potential buyers.

According to the timetable appearing in Mr. Bourque’s report, the fate of JPR could be sealed in the week of May 13. It is at this time that the successful bids for the group or certain of its assets must be finalized.