The ax is about to fall at Groupe Sélection’s head office, since its size will be considerably reduced. At the same time, the restructuring manager tries to recover $700,000 in fees paid to businessman Herbert Black for financing that was never disbursed.
These elements appear in the most recent report of the comptroller Christian Bourque, of the firm PwC, prepared within the framework of the procedures which proceed under the Law on the arrangement with the creditors of the companies (CCAA) since last November.
We learn in particular that in the context of the auctions in force, no proposal has been superior to that of Revera for the portfolio of 25 residences for seniors (RPA) held jointly with Selection. Mr. Bourque suggests that Judge Michel Pinsonnault, of the Superior Court of Quebec, endorse this transaction.
“Additional permanent job cuts are expected to occur in July and August,” Mr. Bourque writes, noting that in the wake of recent and future transactions, the size of the developer and RPA will not change. more the same.
However, the controller does not specify the extent of the early layoffs. It was not possible to obtain details from the latter on Tuesday. The cuts do not affect staff within the RPAs. Currently, the company headed by Réal Bouclin has 186 employees across its various entities. About fifty layoffs took place last December.
When the transaction with Revera is formalized, Selection’s portfolio of 48 RPAs will therefore have shrunk by three-quarters. Another partner, the investment fund Blackstone, had already bought out the stakes of the Quebec company – which owns 12 other complexes.
For residents, these changes are unlikely to have any consequences. Cogir – a rival of Sélection – will become the manager around July 31 of the 25 RPAs that will belong to Revera. Discussions are ongoing and La Presse has found that residents of at least one RPA have already been notified of the arrival of a new manager. It is reasonable to believe that Sélection employees will join the ranks of Cogir.
A new dispute is also on the horizon as part of the restructuring at Sélection. It concerns a sum of $700,000 paid in fees to businessman Herbert Black ($500,000) and his attorneys ($200,000) last November, when the fallen RPA giant protected itself from its creditors .
At that time, Mr. Bouclin was trying to convince Judge Pinsonnault to opt for his recovery strategy rather than that of his bankers. The manager of Selection said he convinced Mr. Black to act as a temporary lender. This businessman offered to put up to 60 million on the table.
The magistrate had finally decided in favor of the plan of the creditors of Selection. In his decision, he lamented that the payments in question were “non-refundable”, adding that Selection “certainly did not have the luxury of losing $700,000 under such rather unusual conditions”. Nevertheless, the monitor is trying his luck in the hope of recovering this sum, paid for “interim financing which was not approved by the court and therefore never disbursed”.
“Despite various exchanges, this file has not progressed and the comptroller, with his attorney, is therefore busy preparing a request which should be filed soon,” writes Mr. Bourque.
In a telephone interview with La Presse, Mr. Black said he had nothing to be ashamed of. Everything was done according to the rules, he says.
“If someone wants tens of millions in reserve, the bank will charge him a fee too,” said the businessman. Anyone would. I don’t believe anything was done illegally. »
When questioned, Mr. Black replied that he had not been made aware of a potential appeal by PwC.
Bidding is not over at Sélection. The controller has extended, until June 28, the deadline for the process for assets such as its participation in the District des Brasseurs project (formerly Molson brewery) and other projects. For Mr. Bouclin’s company, what happens next depends on its ability to find an ally to buy out its partners and keep a handful of assets.
Sélection has already been excluded from Espace Montmorency, a multi-use complex comprising shops, residential towers and underground parking. The Fonds de solidarité FTQ – one of the shareholders – had bought 25% of the Quebec company. Its stake in the project hotel will also be sold to existing partners, namely the Fonds FTQ, Montoni and Urgo.
