Disorganization is widespread in the finances of Groupe Sélection, which also turns a deaf ear even if its bankers ask it to tighten its belt. What was happening behind the scenes of the giant residences for the elderly (RPA) was unusual, according to the representative of its creditors.
“We ask what is the percentage of ownership in a project, we are not able to answer us, launches Christian Bourque, head of the restructuring department of PwC in Quebec. It’s amazing. I made some, files, I’ve never seen that. »
Selection and its creditors were back before the Superior Court of Quebec on Wednesday to determine who will control the organization, currently under the protection of the Companies Creditors Arrangement Act (CCAA). Lenders want to see PwC in charge, while the RPA giant prefers FTI and its candidate Yanick Blanchard as chief restructuring officer.
The two parties will deliver their pleadings this Thursday to judge Michel Pinsonnault, who will take the case under advisement and render his decision no later than Monday, he said. It was a request for reimbursement for a loan of 260 million granted in May 2021 by the banking syndicate which forced Selection to turn to the CCAA.
Before the magistrate, Mr. Bourque painted a portrait that he described as “incomprehensible” and “unacceptable” for an organization the size of Selection. It burns $7 million monthly due to, among other things, shortfalls in its RPPs, demands attributable to its ongoing construction projects, employee salaries and monthly payments estimated at $1.5 million to two personal businesses. controlled by the children of the president and founder Réal Bouclin. These two companies also received 2.5 million before Selection protected itself from its creditors (see capsule).
“Oh! my God…that conversation, it happened many times,” replied the expert, when asked if a warning had been given to the company about its expenses. “These discussions took place last year, this year. »
Group Selection in figures
48 RPPs in Quebec
7 towers of traditional rental housing in operation or under construction
15 projects in development
3000 employees
14,000 housing units
With the exception of once, last week, the representative of the banking syndicate has never been able to meet in person with Mr. Bouclin.
“In 33 years of experience, this has never happened to me,” lamented Mr. Bourque.
revolving doors
Three people have succeeded each other – Richard Nadeau, Heather Kirk and François Montigny – in the position of chief financial officer at Sélection since 2019. According to Mr. Bourque, this testifies to a persistent “instability”. The group’s inability to provide accurate financial information undermines its credibility and raises concerns, he adds.
According to the representative of the creditors, this situation is also detrimental to the elderly occupants of the Selection residences – whose fate is of concern to Judge Pinsonnault.
“If these people aren’t sure that the food, electricity or insurance will be paid for, that’s a major risk in Selection’s activities,” underlined Mr. Bourque.
In cross-examination, the expert was challenged on the content of the plan he prepared for the creditors. The strategy relies on a valuation of Selection’s assets and a sale to restore finances. Investments in projects like Espace Montmorency and the redeployment of the former Molson brewery in Montreal are on the table.
Sélection’s lawyer, Guy Martel, wondered if PwC’s proposal is to “take the carcass of Sélection, cut it into pieces and distribute it to the four corners of the city”. In the opinion of M.e Martel, this is a liquidation plan rather than a recovery plan.
Mr. Bourque replied that Sélection was already planning to sell properties to settle its liquidity problems and repay its debts. This process had been underway for a long time, he added, noting that only one transaction, in the summer of 2021, had been concluded.
“Postponements, postponements and postponements,” replied Mr. Bourque. It makes you wonder if you have the right ball carrier to make these monetizations, when it’s the only way lenders can hope to get reimbursed. »
The latter recalled that Sélection had been placed in default by partners such as Montoni and the Fonds de solidarité FTQ. The bond of trust is also broken on this side, allege the bankers.
Rather than talking about “liquidation”, it is a “divorce” that we are dealing with, believes Mr. Bourque. Partners and creditors no longer “want to play” because they no longer have confidence, he said, adding that the RPA specialist no longer had “financiers”, “partners” and ” liquidity”.
The Bouclin family before the suppliers
While several suppliers are stamping their feet, two companies controlled by Mr. Bouclin’s children have received approximately 2.5 million since last Thursday, including 1.5 million on November 14, the day Selection placed itself under the protection of the CCAA. No other supplier has received such a sum during this period, according to Mr. Bourque. These two companies are used to pay subcontractors and suppliers who do marketing, IT and architectural work for Selection. Judge Pinsonnault described the amount as “enormous”, while Mr. Bourque wondered why these suppliers had been favored over others. The creditors’ representative, however, did not have all the details. This situation arouses the ire of suppliers. Equity, diversity and inclusion consultant Julie Nadon received the $10,000 check she had been waiting for last Friday. However, he bounced back. “I am outraged and flabbergasted, she reacts, learning that millions have been paid to the children of Mr. Bouclin. I’m so sorry for having trusted them and not having demanded to be paid before the delivery of my report. – With André Dubuc, The Press
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- 1989
- Year of founding of Selection Group
source: Selection Group