Seizure of the property of Résidence Plaisance des Îles – Portail des Îles de la Madeleine

The Résidence Plaisance des Îles (RPÎ) and the CHSLD des Îles-de-la-Madeleine are now in receivership. PricewaterhouseCoopers was appointed receiver by the court to take possession of the assets of these two entities deemed insolvent, with the aim of repaying their debts.

These are the National Bank of Canada and the Caisse populaire des Ramées, two guaranteed creditors of the RPIwho asked the Superior Court to appoint a receiver in the case, which the court did on November 12.

The two banking institutions, which sent numerous notices of non-payment to RPI since March 2023, noted that the non-profit organization did not have the necessary liquidity to continue its activities beyond November 15.

As receiver, PricewaterhouseCoopers ensures, among other things, the continuity of operations of the component RPA of the Résidence Plaisance des Îles, since the shutter CHSLD has already been under the provisional administration of the CISSS des Îles since October 29.

For the moment, activities are continuing normally in the seniors’ accommodation and all employees are kept at work.

The receivership resulted in the suspension of the board of directors of RPI ; it is now PricewaterhouseCoopers which controls the finances and day-to-day activities of the debtors.

Under his mandate, the receiver can also solicit one or more potential buyers for the goods, but cannot sell goods worth more than $50,000 without judicial authorization.

Temporary financing

At the request of PricewaterhouseCoopers, temporary financing of one million dollars was recently granted by the National Bank of Canada and Desjardins to continue the operations of Résidence Plaisance des Îles until January 24, 2025.

This funding will allow the continuation of negotiations with the CISSS des Îles and the Ministry of Health and Social Services in order to find a lasting solution to the financial problems of debtorswe can read in the PricewaterhouseCoopers report dated November 11.

Excluding joint debts, the CHSLD des Îles and Résidence Plaisance des Îles together owe nearly $50 million to seven secured creditors and nearly $7.68 million to around sixty unsecured creditors.

This latter amount, however, includes the debt of more than $6.2 million from CHSLD des Îles towards Résidence Plaisance des Îles for unreimbursed advances.

$2.87 million required from the MSSS and the CISSS

Furthermore, the National Bank of Canada and the Caisse populaire des Ramées are asking the court to condemn the MSSS and the CISSS des Îles to pay nearly $2.87 million in accordance with the service agreement concluded in May 2021 between the CISSS and the CHSLD of the Islands to ensure compliance with financial ratios.

This agreement stipulated a adequate liquidity advance on the part of the CISSS, since the basic allocation paid by the public network for the operation of the 65 beds of the CHSLD non-agreed private sector was insufficient to cover the cost of rent due to RPI.

The CISSS failed to meet its obligations to [RPÎ et le CHSLD des Îles-de-la-Madeleine] under the terms of the service agreement and has not advanced the liquidity required to ensure the viability of operations.

Since July 6, 2023, the CISSS of the Islands and the MSSS advanced $1.6 million to CHSLD in order to ensure the maintenance of operations. However, the management of RPI estimates that an additional sum of $2.87 million should have been paid to respect the agreement.

On October 22, 2024, due to the impasse in finding solutions to the financial problems of the CHSLD and of RPIthe CISSS of the Islands notified the CHSLD that he would no longer pay additional advances. This situation is described as shocking by the applicant creditors.

According to the latter, the deterioration of the financial situation of RPI mainly arises from liquidity issues of the CHSLD of the Islands and the refusal of MSSS a you CISSS to provide the required financial support to CHSLDdespite the service agreement concluded in 2021.

The operations of CHSLD des Îles has been in deficit since its opening in 2021, mainly due to the hiring of independent labor.

The creditors report that this lack of liquidity had a direct impact on the operations of RPI who had to absorb these losses by not collecting the rent provided for in the lease and by advancing significant sums since 2021although CHSLD owed more than $6.2 million to RPIdated September 30.

Payment of rent under protest

Additionally, receiver PricewaterhouseCoopers went to court to demand that the CISSS of the Islands, as provisional administrator of the CHSLDpays monthly rent for housing in the RPA which are occupied by the independent workforce who work in the CHSLD.

Due to the housing shortage, between 16 and 24 apartments in the RPA are rented by the CHSLD to house its agency workers.

The CISSS paid the rent for these apartments for the month of November, under protest. Thus, he maintains that he does not owe this sum and specifies that this advance is not an acknowledgment of debt with regard to the CHSLD.

The CISSS and the MSSS consider these amounts as a debt in their favor on the part of the CHSLDwe can read in a correspondence dated November 15 cited in court documents.

According to the PricewaterhouseCoopers report, the CHSLD des Îles owes more than $292,000 to CISSSone of its unsecured creditors.

PricewaterhouseCoopers maintains, however, that these sums accrue to it in its capacity as receiver.

The receiver is clearly entitled to retain payment of the rent [pour la main-d’œuvre indépendante] for the month of November 2024, and to demand that [ce] rent is paid each month by the provisional administratorhe argues in the court document.

This case will be heard on November 27 at the Havre-Aubert courthouse.

PricewaterhouseCoopers, le CISSS des Îles and the Ministry of Health and Social Services declined to comment on the matter.

THE ONE: The Résidence Plaisance des Îles houses a CHSLD with 65 places and a private residence for seniors (RPA) with 143 housing units for autonomous and semi-autonomous elderly people in Cap-aux-Meules. (Archive photo) Photo: - / Isabelle Larose

BY Isabelle Larose