Breaks in services would threaten private residences for seniors (RPA) of Groupe Sélection because subsidiaries linked to the family of the founder do not pay their suppliers, which arouses “deep concern” for the controller responsible for the restructuring. The insolvent company counters that this is false.

The latest report from PwC’s Christian Bourque paints a worrying picture as the real estate developer and RPA manager has been under the protection of the Companies’ Creditors Arrangement Act (CCAA) for more than four months. In addition to potential disruptions at some seniors’ complexes, Sélection is losing millions every month and founder Réal Bouclin’s efforts to try and recover company assets appear to be progressing at a snail’s pace.

“The controller has been notified that several providers, including Videotron and Bell, have either filed collection proceedings or threatened to cease services if their respective accounts are not regularized,” writes Mr. Bourque, in his report of about thirty of pages.

He will present his observations this Friday to Judge Michel Pinsonneault, of the Superior Court of Quebec. Since the start of the proceedings, the magistrate, who is overseeing the case, has repeatedly said that the residents of the RPAs should not bear the brunt of the debacle of Selection.

We are not talking about a potential disruption in the food supply or the supply of basic products, but of telecommunications services (cable and internet) as well as computer support.

In a statement emailed to La Presse on Thursday, Selection challenges the creditors’ representative’s assumption. The company says it has “obtained assurances that there will be no disruption of service to residents.” At the time of protecting itself from its creditors, Selection managed a network of 48 RPAs. Now, 11 resorts are owned by Blackstone and another 25 are expected to be taken over by Revera.

It is Évolia and Bläckfisk, two entities related to Sélection, which do not pay their bills. The former is run by Mr. Bouclin’s children, according to the business register, and the businessman’s daughter is part of the management of the latter.

Essentially, these two companies are used to pay subcontractors and suppliers who do marketing and IT work, among others. Unlike Selection, they did not protect themselves from their creditors. Évolia and Bläckfisk may therefore be subject to recovery measures. Mr. Bourque says he requested access to Evolia’s finances in order to take stock, but “for now”, his request “has remained unanswered”.

According to the report, Sélection attributed this lack of cash to “uncollected revenue” in connection with the Espace Montmorency and District Union projects, adding that the “situation” was “under control”. Mr. Bourque clarified that he had not received any financial information “to date” allowing him to believe that this was indeed the case.

“For several months, the controller has been aware of the significant delay in receivables to pay certain suppliers, specifies Selection, in its statement. All services paid for by the residences have been rendered and will continue to be rendered. »

As an auction of Selection’s assets prepares, the company is still losing money. Its monthly operating loss is estimated at 9 million despite the controller’s cost reduction efforts. It provides for further layoffs and asks Selection’s lenders to release an additional $20 million in interim financing.

Mr. Bouclin and his financial advisors are still trying to find a way to recapitalize the company. The businessman would like to ensure the continuation of general construction activities and continue to manage nine RPAs in which Sélection holds a majority stake. Seven lands deemed “strategic” – including that of the former Molson brewery in downtown Montreal – are part of Mr. Bouclin’s recovery plan.

There is only one way to do this, and that is with the arrival of a “solid financial partner”. The catch: it might be hard to find.

“Several financial partners, lenders and other stakeholders involved with Selection have made it clear that they are no longer prepared to support Selection’s activities,” recalls Mr. Bourque.

According to him, Mr. Bouclin and his advisers have a lot on their plate. So far, the documents presented are “high level” and not supported by a comprehensive financial model to “quantify funding requirements”. The details obtained from the businessman regarding the identity of the potential financial partners sought, the degree of progress of the discussions and a timetable for the filing of a letter of intent are only “generic”, writes the controller.