Groupe Sélection’s coffers are emptying while the dispute between the company and its bankers surrounding the auctioning of its assets continues. However, without these auctions, there will probably be no more new funds to make it work from the end of June, explained Friday the head of restructuring.
“We have come to a crossroads, [en ce] feel that I do not think I will be able to obtain more interim financing without a monetization process, ”explained Christian Bourque, of PwC, on Friday, before Judge Michel Pinsonneault, of the Superior Court of Quebec.
Certain creditors of Sélection – financial institutions – agree to release an additional 20 million to ensure the maintenance of the activities of the real estate developer and manager of residences for the elderly (RPA) which has turned to the Companies Creditors Arrangement Act (CCAA) last November.
The condition: the green light from the court for the auction process of the assets – participations in RPAs, real estate projects and land – of Selection in order to restore its finances. The deadline had been set for March 20, but the banking syndicate agreed to the deadline being pushed back a week later.
Eight million will be paid into company accounts to avoid disruption next week. We will debate the auction conditions next week before Judge Pinsonneault, who will have to decide.
Selection Group believes that the monitor’s plan constitutes a wholesale “fire sale” that will lead to an “outright” liquidation. The lawyers of the founder Réal Bouclin propose a “recovery plan” with staggered sales over time rather than in blocks. This will provide more time for the businessman to conclude agreements with financial partners and keep assets, they plead in their challenge.
However, replies Mr. Bourque, the additional funding only makes it possible to ensure the continuation of activities until June 24th. It is therefore necessary to proceed quickly to obtain new funds.
Moreover, despite the steps taken so far by Mr. Bouclin, the controller says he has no idea of the identity of the businessman’s potential new backers.
“We don’t know who it is, we don’t know when and we don’t know how much,” summarized the controller before Judge Pinsonneault. “The further we go in time, the more restrictive the conditions will be for accessing additional funds. »
Other terms of the auctions proposed by the controller also arouse discontent. Creditors, who are partners of the Quebec company in certain projects, oppose the suspension of restrictive sales clauses requested by the monitor. Essentially, these creditors want to have a say in whether they are affected by a transaction.
If so, it could have a “devastating effect” on the auction since “potential buyers could withdraw from submitting a bid if they conclude that they have no reasonable chance” of believing that it could be retained.
The cable will remain, says Selection
As a curtain raiser to the hearing, Mr. Bourque’s concerns about potential service disruptions – cable and telephony – in RPAs because bills are unpaid sparked a strong reaction from Selection’s lawyer, Joseph Reynaud.
In his opinion, the controller refused to take into account elements which, according to Ms.e Reynaud, testified that the situation was under control despite the late payments. The RPA giant even presented a sworn statement from its chief financial officer, Robert Laplante.
It is Évolia and Bläckfist – two subsidiaries linked to Mr. Bouclin – who worry the controller. These two companies are used to pay subcontractors and suppliers who do marketing and IT work, in particular. Unlike Selection, they have not sheltered themselves from their creditors.
Évolia and Bläckfisk may therefore be subject to recovery measures.
In his affidavit, Selection blames the “negligence or [le] refusal” of the Fonds immobilier FTQ to pay sums due to Évolia and Bläckfisk in connection with the Espace Montmorency and District Union projects. This gives the two subsidiaries a hard time, says Selection.
The company accuses the controller of having “deliberately chosen not to disclose” the talks of the subsidiaries with the telecommunications providers to avoid disruptions in service.
Mr. Bourque replied that there was a way to clear things up.
“The only way to manage this risk is to have an idea of the financial health of Évolia,” he told Judge Pinsonneault. We asked for access to Évolia’s accounting books. This has been formally requested. »
Mr. Bourque has still not received a positive response.
- 20 millions
- Interim financing initially offered by Groupe Sélection bankers
- 9 million
- Groupe Sélection monthly operating loss