Breaks in services await for private residences for seniors in group selection (RPA) as subsidiaries linked to the founder’s family do not pay their suppliers, sparking “deep concern” for the controller in charge of restructuring. The bankrupt company replied that this was false.
A recent report by PwC’s Christian Bourque paints a worrying picture as the real estate developer and RPA manager are on the defensive. Companies Creditors Establishment Act (CCAA). In addition to potential disruptions at some seniors complexes, Selection is losing millions each month, and founder Real Boecklin’s efforts to recoup the company’s assets appear to be progressing at a snail’s pace.
“The Comptroller has been informed that a number of suppliers, including Videotron and Bell, will file recovery proceedings or threaten to suspend service unless their respective accounts are settled”, Mr Bourque wrote in his thirty-page report.
He will present his observations to Quebec Superior Court Judge Michel Pinsonault this Friday. Since the trial began, the magistrate overseeing the case has repeatedly said that RPA residents should not bear the brunt of the selection debacle.
The amounts due were estimated by the comptroller to be in the “several millions” of dollars. It was impossible to calculate the exact amount because Mr. Bourque said he was unable to obtain the financial information he requested.
We are not talking about a potential disruption in the supply of food or basic products, but telecommunications services (cable and internet) as well as computer support.
In a statement emailed to Press, on Thursday, disputes the assumption of the representative of selective creditors. The company said it was “guaranteed that there will be no cuts in service to residents”. When it came time to protect itself from creditors, Selection managed a network of 48 RPAs. Now, 11 complexes are owned by Blackstone and another 25 are expected to be acquired by Revera.
It’s Évolia and Bläckfisk, two companies of the selection, that don’t pay their bills. According to the business register the former is managed by Mr Boecklin’s children and the businessman’s daughter is part of the management of the latter.
Essentially, these two companies are used to pay subcontractors and suppliers, especially those who do marketing and IT work. Unlike the option, they did not protect themselves from their creditors. Évolia and Bläckfisk may therefore be subject to recovery measures. Mr Bourque said he had requested access to Evolia’s finances in order to take stock, but “at present”, his request “has not been answered”.
The controller expressed deep concern over the financial health of these companies [apparentées à Sélection] and particularly to the consequences of service interruption on select operations.
Christian Bourque, Controller of PwC
According to the report, Selection attributed the lack of liquidity related to the Espace Montmorency and District Union projects to “uncollected revenue”, adding that the “situation” is “under control”. Mr. Bourque stated that he had not received any financial information “to date” that would lead him to believe that this is indeed the case.
“For several months, the controller has been aware of significant delays in receivables payable to certain suppliers in its statement, the option said. All services paid for by the residences have been provided and will continue to be provided. »
As the auction of the option’s assets is being prepared, the company is still losing money. Despite the controller’s cost-cutting efforts, its monthly operating loss is estimated at 9 million. It provides for other terminations and asks the option’s lenders to release an additional $20 million in interim financing.
Mr. Boecklin and his financial advisers are still trying to find a way to recapitalize the company. The entrepreneur wants to ensure the continuity of normal construction activities and continue to operate the nine RPAs that hold the option majority stake. Seven sites deemed “strategic” — including the former Molson brewery in downtown Montreal — are part of Mr. Boecklin’s recovery plan.
There is only one way to get there and that is with the arrival of a “solid financial partner”. Problem: Can be hard to find.
“Many of the financial partners, lenders and other stakeholders associated with the selection made it clear that they were no longer willing to support the selection activities,” Mr. Bourque recalled.
According to him, Mr Boecklin and his advisers have a lot on their plate. So far, the documents presented are “high level” and not supported by a full financial model to “calculate funding needs”. Details obtained from the businessman about the identity of the financial partners sought, the level of progress of the negotiations and the timetable for filing the letter of intent were “general”, the controller wrote.
(Before filing for CCAA protection)
- 48 private residences for the elderly in Quebec
- 7 towers of traditional rental housing in operation or under construction
- 15 projects are under development
- 3000 employees
- 14,000 housing units
- March 28
- Date Option Lenders want to auction the properties
- 12 million
- Amount in the RPA giant’s coffers as of March 4