The Quebec government could lose millions of dollars in the sale and divestment of the assets of Louis Garneau Sports, a company on the brink of bankruptcy.
Under debt and under the protection of the Bankruptcy and Insolvency Act, the company recently sold most of its assets to Lowe, a retailer born in Montreal but now owned by companies based in San Francisco and Barbados, a tax haven.
Details of the transaction, which was authorized by the Superior Court on September 13, were not disclosed. But according to the information received The JournalLolay's payment in no way covers the $20 million in residual debts of Louis Garneau, including at least $7.3 million assessed by Investment Quebec (IQ).
On its behalf, the Ministry of Economy, Innovation and Energy (MEIE) was coy when questioned about its shortfall. “As the amount of the purchase transaction is not sufficient to cover all the debts, the Ministry will work with the trustee (…) to recover the maximum amount invested by the Government of Quebec.”
Four years later
We recall that in 2020, after coming close to bankruptcy and laying off more than a hundred workers, Louis Garneau Sports went into the hands of Champlain Financial Corporation, a Montreal investment company, that same year.
Louis Garneau, in December 2020, during an announcement to protect his company.
Photo by Stevens LeBlanc
At the time, the rescue operation was accompanied by a $10M line of credit from the National Bank and a $5M loan from IQ, the financial arm of the Quebec government.
Four years later, Louis Garneau's remaining firms are $19.7 million in debt, according to the latest documents available. National Bank and IQ are its two main creditors, with respective claims of $11.08M and $7.3M. This is followed by the City of Saint-Augustin-de-Desmours, which has a deficit of $220,500.
Other deletions
The latest report on mass layoffs from the Quebec government shows the Saint-Augustin-de-Desmours company laid off 33 of the last forty employees it still had in early September three weeks ago.
Pierre Simard, director of Champlain Financial Corporation, has been the controlling shareholder of Louis Garneau Sports since 2020.
Photo by Stevens LeBlanc
About 70 Mexican workers at a branded bicycle clothing factory also suffered the same fate. Sombrio And Sugoi, Also features Louis Garneau. Champlain Financial Corporation's boss, Pierre Simard, is trying to interest investors in buying what's left of the premises these days.
Despite everything, the latter refuses to talk about the “end of Louis Garneau”. “This may be the end of the business as some have known it in the past,” he said. But this is not the end of Louis Garneau, this iconic brand should continue to live and thrive under Lolay's leadership.
What does Lole think of Garneau's new boss? Impossible to know. The company, which is based in Quebec but whose communications are handled from San Diego, California, ignored all of our requests for information for a week.
More Stories
Russia imposes fines on Google that exceed company value
Historic decline in travel in Greater Montreal
Punches on the “Make America Great Again” cap: Two passengers kicked off the plane