Dissatisfied with the decision of the High Court, which leans on the side of the real estate giant’s lenders, the management of Groupe Sélection announced on Monday night its intention to appeal the ruling handed down that day by the court.
“Groupe Sélection does not agree with many points of law retained in the conclusions of the judgment that go against an effective financial restructuring […] “, declared in a press release the president and CEO of the company, Réal Bouclin.
The largest owner and operator of private residences for the elderly (RPA) in Quebec therefore intends to seek leave to appeal the ruling, which has just been handed down, and plans to seek at the same time the imposition of “a suspension so that it cannot be executed before the end of the judicial process.
A few hours earlier, the court had ruled in favor of the Groupe Sélection lenders, entrusting the responsibility for recovery proceedings to the PricewaterhouseCoopers (PwC) teams.
In an expected decision, following four days of hearings last week, Judge Michel A. Pinsonnault on Monday rejected the company’s turnaround plan and fully accepted the application submitted by the National Bank of Canada, on behalf of eight financial institutions.
Over a billion in debt
Struggling with serious financial problems, it will be remembered that Sélection had placed itself under the protection of the CCAA, on November 14.
His debts, with the banking syndicate, would reach 272 million dollars. To these, according to Selection Group, would be added debts of at least $995 million with its employees, suppliers and other mortgage lenders.
Lack of transparency
On the verge of bankruptcy, the company with a particularly complex structure – no less than 137 related companies participate – suggested that the orders of the restructuring procedures be entrusted to a duo made up of FTI Consulting, as controller, and the businessman Herbert Black, as interim funder.
For its part, the group of credit institutions rather offered the services of PwC.
For a set of reasons, explained in a 25-page ruling, including one, apparently, related to the lack of transparency of the management and the loss of confidence of many partners in it, Judge Pinsonnault finally opted for the recovery plan presented for him.
A very worrying financial situation
- 56% of their residences would be in deficit.
- Average occupancy rate: 80%
Some known credits:
- $272.2 million to the banking syndicate
- $925 million for mortgage lenders
- $63.5M to $118M to various vendors
- $6.8 million to its employees (holiday pay)
Legal mortgages galore
A sign of concern, only in the last week some thirty legal mortgages on real estate projects carried out by the Selection Group have been registered, he learned The newspaper.
These mortgages, for a total amount of $6.65 million, were registered by just over twenty companies in the construction sector, which are currently working on five Groupe Sélection real estate projects.
The statutory mortgage allows contractors who have been involved in the construction or renovation of a building to protect the sums owed to them for the work carried out. Normally, a mortgage of this type has priority over conventional mortgages, even if these have been previously published.
Five specific projects
Five specific Groupe Sélection projects were targeted by entrepreneurs last week. We are talking about the Lokia Saint-Sacrement in Quebec, the Sélection Retraite Repentigny, the Liva complex in Mirabel, the District Union complex in Lachenaie (Terrebonne) and the Veritage Lachine (or 2100 Remembrance) in Montreal.
The two most important legal hypotheses relate to the formwork. One of them was quoted by Coffrage Forma+, for a work worth $1.2 million, in Mirabel. The second was registered by Coffrages Atlantique, for $881,902, in Repentigny.
By the way, the new Liva complex in Mirabel, on which work began during the summer, is the project with the highest number of legal mortgage registrations in one week. The seven registered mortgages add up to no less than $2.46 million.
For its part, Lokia Saint-Sacrement of Quebec obtained ten new legal mortgages for a total amount of $2.13 million. Finally, Sélection Retraite Repentigny saw eight new legal mortgages registered on their building, worth $1.64 million.
– With the collaboration of Philippe Langlois, of the Research Office
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