The liquidation of Guzzo is starting to take shape. The group is closing two of its 10 cinemas today: its “emblematic” Marché Central cinema in Montreal, which has 18 rooms, as well as that of Saint-Jean-sur-Richelieu.
Posted at 2:49 p.m.
Updated at 3:34 p.m.
“This extremely difficult decision is necessary to ensure the sustainability of our family business, following the challenges imposed by the global health crisis in recent years. And this, despite all the efforts made by the team and our collaborators to find solutions,” mentions the company in a press release distributed through Facebook.
Guzzo’s assets have officially been in liquidation since December 19.
Since the fall, CIBC and private lenders have been seeking to be reimbursed tens of millions. They initiated insolvency proceedings and obtained the group’s receivership in Superior Court.
“Aware of recent challenges and increased public attention, we remain committed to implementing concrete measures to strengthen our financial stability and improve our services,” Guzzo said in his press release. Although we have fought to preserve all jobs, certain measures have become inevitable. »
The group has also been facing lawsuits for months from several owners of buildings housing some of its cinemas, including the two that the group has just closed permanently.
Owner of the Central Market, the British Columbia Pension and Public Insurance Fund BCIMC is suing Guzzo for unpaid rent of more than $1.9 million.
For its part, the St-Luc St-Jean Shopping Center is demanding a dozen million. The amount includes rent, but above all nine million paid to Guzzo for work on his property, which the group would never have completed.
-What is a receivership?
A receiver is appointed by the court under the Bankruptcy and Insolvency Law to examine, manage, or even liquidate the assets of a third party or a company in financial difficulty. During a “receivership”, this task usually falls to an insolvency firm, such as Raymond Chabot in the case of the Guzzo group.
Isolated cinemas
In his December decision, judge Michel Pinsonnault ordered a clear separation in Guzzo’s accounts, between the operation of cinemas and the rest of its activities in real estate, construction and catering.
Receiver Raymond Chabot then established with the company’s management revenue forecasts of $1.3 million and a surplus of $320,000 for these activities, after payment of expenses, over 13 weeks.
“The receiver may contact the court in the event of an operating deficit of the Cinémas Guzzo group in order to report to the court and obtain the appropriate adjustments,” the judge warned.
108 million in debt
In total, Guzzo’s creditors are demanding nearly $108 million, according to the latest report from controller Raymond Chabot.
Among the creditors, the different levels of government are claiming more than 10 million in withholding taxes and sales taxes that the company kept in its coffers, in municipal taxes and taxes.
