Ultimately, the Mach Group will buy a portion of the real estate portfolio of Stefan Hoot’s fallen empire for a sum of around $560 million. Not only was there no court approval to proceed, none of the creditors objected to the proposed order.
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The more than half a billion dollar deal was presented in detail to Superior Court Judge Jean-Francois Emmond on Wednesday.
The offer allows for the repayment of preferred loans, namely legal presumptions and municipal taxes, as well as the payment of Huot Group’s first and second rank creditors, therefore institutional creditors. We’re talking about a total of $11.8 million here and related amounts of about $544 million.
This means a shortfall of approximately $117 million in total revenues of $674 million connected to the five real estate projects covered by the transaction.
These third-tier lenders consisted of millionaire investors recruited to save the Huot Group. However, the latter will not lose their entire stake as they have been given a 20% stake in the new companies created by Mack director Vincent Chiara.
The order submitted on Wednesday was once again unanimous among creditors. All that was missing was the approval of Judge Jean-Francois Emond, who took the case under advisement. However, he promised to think quickly.
That’s because the parties want to complete the transaction by Friday, which would free up $100 million promised by Mach Group after signing on to undertake reimbursements.
The remaining amounts will be debited in the coming weeks as the refinancing of the projects becomes active.
“We believe that this is the best offer we can get and that no creditor can complain that the process has not gone well,” assured Jean Gagnon, the receiver on the file, recommending Judge Emmond approve the deal.
The receiver also has a word for the tenants of the five complexes targeted by the transaction, as well as employees linked to it.
For residents, it appears “obvious” that the transaction will benefit them. “Having an owner with long-term goals is more interesting than a receiver,” Mr. Gagnon underlined.
As for the employees, they will not be included in the transaction, but Mack Group has confirmed that offers will be sent to them.
Upcoming meeting of creditors
Regarding Stéphan Huot and his $1.2 billion bankruptcy, it was revealed on Wednesday that a creditors’ meeting is scheduled for December 5. However, his lawyers and the trustee in the file are considering postponing the process due to the group’s dealings with Mac.
“Makes it possible to reduce transactions [d’environ] Mr. Huot’s debt is $600 million,” said the trustee in charge of the case.