After Réal Bouclin of the Selection GroupAnother major Montreal real estate developer is on the brink of colossal debts running up hundreds of millions of dollars from his companies.
Entrepreneur Ronen Basal, unknown to the general public, is behind a dozen large-scale rental apartment construction projects in Greater Montreal.
Ronen Basal. Entrepreneur
It was he in particular who directed the construction in Brossard of a 127-unit building on the site where the Tour Tysel was originally to be, by developer Tyronne Candappa, who never raised the ground.
“We wanted to grow too fast. […] We had 350 employees,” he lamented, when he met at a restaurant on the edge of Décarie Boulevard in Montreal in December to explain his difficulties.
He makes no secret of it: he is now considering personal bankruptcy.
Their companies owe more than $30 million to Revenu Québec and are the subject of a tax investigation that suspects a scheme.
Photo Chantal Poirier
A $2 million home in Côte-St-Luc was seized by Revenu Québec in May as part of the proceedings against Ron Basal.
Debts of $276 million
Recently, one of his companies requested judicial protection. It has indicated its intention to make a proposal to its creditors for debts that total, for this case alone, $276 million.
Since 2018, another six of his companies have gone bankrupt.
Even a $1.6 million chalet that Basal owns in Saint-Donat on Lanaudière is about to be taken over by a bank, according to him.
Several creditors, including a private lender, and individuals are suing him in parallel.
Both of his parents, Baruch and Judith Basal, who hold positions in the companies, announced in August their intention to make a proposal to their creditors. Their joint debts amount to 23 million dollars.
Photo provided by a journalistic source.
A $1.6 million villa owned by the Basal family in Saint-Donat is about to be repossessed by a creditor, according to the developer.
“They killed my family”
Sitting in the restaurant, Ronen Basal criticized the work of Revenu Québec, which he said would have aggravated his financial problems by withholding expected payment amounts (GST and QST refunds) and making his lenders nervous.
“They killed a family. […] They laundered me with fines and interest,” he said.
“The objective is to sell the properties to have money for the secured creditors and free up an amount for the ordinary creditors,” explained Gaetano Di Guglielmo, senior vice president of the MNP firm, in charge of the restructuring file for one of the companies.
“Among other things, he owes a secured creditor, Romspen, I think it’s $230 million,” he explained.
BUILDINGS CONSTRUCTED BY THE COMPANIES SUBJECT TO INVESTIGATION
1. 7070 Côte-St-Luc Road
2. 6700, The Avenue, Côte-St-Luc
3. 6710 Côte-St-Luc Road
4. 6250 Lennox Avenue, Montreal
5. 10 150 Saint-Laurent Boulevard, Montreal
- 126 unit building
6. 5792 Parkhaven Avenue, Côte-St-Luc
- 112 unit building
7. 8115, bull. du Saint-Laurent, Brossard
- 127 unit building
Revenu Québec suspects a scheme
The numerous bankruptcies of his companies are currently attracting the attention of the tax authorities, who suspect a “ploy” (scheme in English) in progress.
According to the scheme outlined by Revenu Québec, several Basal companies claimed substantial GST and QST refunds from the tax authorities, before declaring bankruptcy and transferring their real estate assets to other companies.
Therefore, they did not pay the taxes they were required to pay when the real estate projects were completed, the tax authorities allege.
Revenu Québec raided the downtown offices of trustee Litwin Boyadjian in May and seized Basal’s personal residence in Côte-St-Luc, court documents reveal.
“companies [de Basal] are indebted to Revenu Québec for a sum of more than 30 million dollars for GST and QST, Québec business taxes and employer deductions of origin,” the tax authority maintains in a document filed with the Tax Court of Canada.
In an interview, Ronen Basal denied doing anything illegal and said that his main lender, Romspen, had for all intents and purposes taken control of his companies after his troubles started.
A Revenue Quebec researcher says he saw Romspen’s 2020 annual report indicating that a loan to a bankrupt Basal company would have generated a 5.6% return for the lender.
Romspen did not respond to an email.
“Since a case is currently being investigated, we have no public information to share with you,” a Revenu Québec spokesperson said in an email.
- Ronen Basal was active in the diamond industry before moving into real estate. Revenu Québec alleges in a lawsuit that the Basal family companies were bankrupted in 2013 after millions of dollars worth of diamonds went missing. In an interview, however, Mr. Basal strongly refuted this version of events.
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