Groupe Sélection and its president Réal Bouclin “do not have the means to match their ambitions” when they ask for more time to redress the insolvent company, decides the Superior Court of Quebec. The company’s assets must quickly be put up for auction in order to “ensure” its “survival”, the court ruled.
Even if the approach suggested by the businessman is logical, the debt of the real estate developer and manager of residences for seniors (RPA) is “excessive”, even “unsustainable”, writes judge Michel Pinsonnault, in his decision given on Friday evening.
“If Mr. Bouclin wanted more time for (the auction) to take place in more than two phases, it was his responsibility to provide the controller with the necessary tools to allow him to consider such a scenario given the major financial constraints. existing, ”underlines the magistrate.
However, the president of Sélection still seems to be at the stage of talks with potential donors.
Sélection and its bankers agree that assets must be auctioned to finance the company’s recovery, which turned to the Companies’ Creditors Arrangement Act (CCAA) last November. PwC, which acts as controller, intends to put all the buildings and land up for auction next week and transactions could be completed as early as July.
The RPA giant, which alleges that the auctions are only a disguised liquidation, asked that the process be staggered until February 2024. Mr. Bouclin even appeared before Judge Pinsonnault on Tuesday to plead his case. . It was the first time he had explained himself to the magistrate since his company had taken shelter from its creditors.
“A recovery plan can hardly be implemented before the financial of the company has been successfully completed, especially in the case at hand,” said the magistrate.
Despite the efforts to reduce expenses made by Christian Bourque – the head of the restructuring – the monthly operating loss of Selection fluctuates between 7 and 9 million, recalls the decision. The rollout of the auction process was conditional on additional funding of $20 million from Selection lenders.
Judge Pinsonnault also launches a new call for collaboration between the controller and Selection. A climate of mistrust has settled between the two parties, he laments
“There seems to exist in the mind of Mr. Bouclin a misunderstanding […] on the role of controller who always seems to be perceived as the henchman (of the lenders) to whom he would answer first and foremost”, writes Judge Pinsonnault .
He urges the two parties to communicate better. It also means that the businessman should be more involved in negotiations with different parties. Mr. Bouclin hopes to be able to find a new financial partner to keep certain assets – including seven strategic lands for projects, including that of the former Molson brewery, in the east of downtown Montreal.
By email, Selection said “take note” of the judgment.
“We will continue to work together with all the parties involved and we remain aligned with our objective of joining forces with strategic partners who will allow us […] to achieve our recovery. »
According to the schedule in Judge Pinsonnault’s decision, the bidding process should begin next Tuesday.
The court also accepts the request of the monitor, who wanted the suspension of restrictive covenants in the context of the auction. This aroused discontent among some of Selection’s partner creditors, who wanted to have a say in whether they were affected by a transaction.
According to PwC, this would have had a “devastating effect” on the auction since potential buyers could have been left on the sidelines without a real “reasonable chance” of submitting a winning bid.
