Insolvency | CIBC wants to liquidate Cinémas Guzzo

CIBC plans to request the liquidation of Cinémas Guzzo, from which it is demanding more than $38 million.

The bank is the largest lender to the Quebec big screen mogul. She must go to Superior Court on Friday to obtain her sequestration.

If the judge grants his request, the Raymond Chabot firm will be responsible for managing Guzzo’s activities. CIBC then intends to request the liquidation of its assets under the Bankruptcy and Insolvency Act according to its request, which The Press obtained.

Under the Bankruptcy and Insolvency Act (BIA), the company could continue its activities until its resale in spare parts.

On the phone with The Pressthe president assures that he intends to oppose CIBC’s request. “We are going to challenge it, because it’s a gang of imbeciles,” said Vincent Guzzo.

He assures that he will be able to repay the bank within the next two weeks thanks to new financing, without giving details.

” Neglect “

In its request, the bank lists the numerous negligences that it accuses Guzzo of and mentions having had to pay his tax and Hydro-Québec bills in his place, to preserve his rights on his buildings put up as security.

“CIBC is also concerned about the treatment of employees of the Guzzo group, and the latter’s inability to adequately manage its liquidity,” mentions the bank’s request.

The financial institution explains that the problems began in 2022, when the City of Laval published an appeal to reimburse unpaid taxes of $750,000. The bank then said it had granted a delay to let the group resolve its problems with the municipality.

“However, the agreed payment deadlines were not respected,” she points out. In fact, the City of Laval informed CIBC in January 2023 that taxes for 2022 remained unpaid and that procedures to sell the buildings would soon be initiated. »

Running out of patience, the financial institution says it notified Guzzo in August 2023 that it intended to end its financial relationship with the group, while granting him several deadlines to settle his accounts.

“CIBC attempted to speak with the Debtors and gave them the opportunity on multiple occasions to remedy their defaults, without any success. Each time, the debtors make commitments that they are unable to respect, or ignore the correspondence sent by CIBC,” laments the bank.

Advances to shareholders on the rise

Despite the precarious financial situation that CIBC describes, the group would have increased its payments to its owners or their relatives, according to its request to the Superior Court. “Advances to related parties (which bear no interest or payment terms) increased by $765,000 in 2023.”

According to the bank, the group’s cumulative deficit reached 46 million as of December 31, 2023 and its net loss from operations for last year, 6.5 million.

The financial institution says its “internal security measures” froze Guzzo’s accounts in May 2024. That month, his overdraft reached approximately $326,000, his request states.

Mysterious buyer

During its discussions in recent weeks with Guzzo, CIBC said it received a letter according to which the group had “held discussions with a potential investor” to acquire 50% of the vast land it holds in Laval.

The bank says it asked to see the letter. “The Guzzo group never responded to these requests,” laments the bank.

Furthermore, CIBC says it became aware of information in the media “which had not previously been disclosed to CIBC”.

At the beginning of October, Vincent Guzzo stated in an article in The Press that land held by the group in Laval was worth 81 million, more than double what CIBC was asking for. The bank asked to see the valuation report, “but the Guzzo group never granted this request,” she laments.

The financial institution also says it noted in our pages its statements to the effect that it was about to refinance part of its debts. “To CIBC’s knowledge, this refinancing was never completed. »

According to the bank, Vincent Guzzo also made “erroneous declarations”. The boss had stated to The Press that his problems with the bank began after his arrest for criminal harassment and breach of conditions, charges dropped in November 2023.

“However, CIBC’s decision taken in August 2023 was rather the result of the significant defects of the Guzzo Group, as described above, and not of Mr. Guzzo’s personal problems with the law,” says the bank’s request.

Private lenders, Equitable Bank, Q-12 Capital and Q-8 Capital, are also demanding nearly 26 million from the Guzzo group.

Quebec, Ottawa, Laval and Montreal are also claiming nearly five million in unremitted taxes and withholding taxes, according to the Nominis real estate database.