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Check group disintegration | Residents may lose cable and telephone

Downtimes in services may be awaiting the Groupe Sélection’s private residences for the elderly (RPA) because subsidiaries linked to the founder’s family do not pay their suppliers, causing “deep concern” for the controller in charge of the restructuring. The insolvent company replied that this was not true.

The latest report by Christian Burkie of PricewaterhouseCoopers paints a worrying picture as the real estate developer and robotic technology manager has been under protection. Corporate Creditors Arrangement Act (CCAA). In addition to potential disruptions at some of its senior citizens’ complexes, Sélection is losing millions every month and founder Real Bucklin’s efforts to try to recover the company’s assets appear to be progressing at a slow pace.

“The Controller has been notified that several suppliers, including Videotron and Bell, have introduced refund procedures or threatened to stop services if their accounts are not reconciled,” Mr. Burke wrote in his nearly thirty-page report.

He will present his remarks on Friday to Judge Michel Pinsonault, of the Quebec Supreme Court. From the beginning of the proceedings, the judge, who is overseeing the case, has repeated many times that the population of the RPA should not bear the brunt of the catastrophe of choice.

The comptroller estimates the outstanding amounts to be “several million” dollars. It is impossible to say the exact amount because Mr. Bourque says he was unable to obtain the required financial information, which he regrets.

We are not talking about possible disruptions in food supplies or the supply of essential products, but about telecommunications (cable and Internet) services, as well as computer support.

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In a statement emailed to JournalismOn Thursday, the choice to take over was disputed by a creditors’ representative. The company says it has “obtained assurances that there will be no reductions in the service provided to the population”. When the time came to protect itself from its creditors, Sélection ran a network of 48 RPAs. Now, Blackstone owns 11 and Revera is expected to acquire another 25.

Two of the perpetrators

Évolia and Blackfisk, two Sélection-related entities, are not paying their bills. The first is run by Mr. Bucklin’s sons, according to the commercial register, and the businessman’s daughter is part of the management of the second.

Essentially, these two companies are used to pay subcontractors and suppliers who do marketing and IT work, in particular. Unlike selection, they did not protect themselves from their creditors. Therefore, Evolia and BlackVisc may be subject to recall procedures. Mr. Bourque said he had requested access to Evolia’s finances for the assessment, but that “for the time being,” his request “remains unanswered.”

The Controller expressed serious concern about the financial condition of these companies [apparentées à Sélection] In particular, the implications that the outage could have on Selection’s activities.

Christian Burke, Controller of PricewaterhouseCoopers

According to the report, Sélection attributed this liquidity shortfall to “uncollected income” in relation to its Espace Montmorency and District Union projects, adding that the “situation” was “under control”. Mr Burki explains that he has not received any financial information “yet” that would allow him to believe that this is indeed the case.

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“For several months, the Comptroller has been aware of significant delays in dues for the payment of certain suppliers,” Selection states, in its statement. “All services paid for by the residences have been provided and will continue to be provided.”

in the red

With Selection’s assets auctioning ready, the company is still losing money. Monthly operating loss is estimated at 9 million despite the controller’s efforts to cut costs. This provides for other layoffs and requires Selection’s lenders to release an additional $20 million in interim financing.

Mr. Bucklin and his financial advisors are still trying to find a way to recapitalize the company. The businessman wants to ensure the continuation of general construction activities and to continue to manage nine robotic operating systems in which Sélection has a majority stake. Seven locations considered “strategic”—including the former Molson Brewery in downtown Montreal—are part of Mr. Bucklin’s recovery plan.

There is only one way to get there, and that is the arrival of a “strong financial partner”. The problem: It can be hard to find.

“Many of the financial partners, lenders and other stakeholders involved in Sélection have made it clear that they are no longer willing to support Sélection’s activities,” Mr. Bourque recalls.

According to him, Mr. Bucklin and his advisors have a lot to do. To date, the documentation provided is “high-level” and not supported by a complete financial model to “determine fund needs”. The details obtained from the entrepreneur regarding the identity of potential financial partners sought, the progress of the discussions and the timeline for submitting the LOI are only “general,” the observer writes.

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  • March 28th
    Set-date lenders want to auction assets

    Source: PricewaterhouseCoopers

    12 million
    The amount is in the coffers of the RPA giant as of March 4th

    Source: PricewaterhouseCoopers