The Guzzo group will not escape liquidation. But while his family conglomerate will be sold in pieces, his boss will at least be able to retain control of his cinema activities.
Posted at 6:47 p.m.
The largest independent owner of theaters in Quebec has already been under the supervision of interim receiver Raymond Chabot since November 22. Its largest creditors, CIBC and private lenders, want to see the court broaden the firm’s powers to take control of the group and liquidate its assets in order to repay them.
At the Superior Court, Judge Michel Pinsonnault has still not ruled, but he has already announced that he will grant their request, after a day of negotiations between the parties to agree on the details. “It remains to be determined all the powers that I will give to the receiver,” he said.
Expectedly, Guzzo and his creditors will receive his adjusted order on Wednesday.
What is a receivership?
A receiver is a person appointed by the court under the Bankruptcy and Insolvency Law to examine or even manage the property of a third party or a company in financial difficulty. When the court orders a “receivership”, this task usually falls to insolvency firms, such as Raymond Chabot in the case of the Guzzo group.
Profitable cinemas?
In Superior Court, receiver Dominic Deslandes explained that the conglomerate still plans to make money with its cinemas, if we isolate them from its other – loss-making – activities in construction, real estate and restaurants.
“Cinema is the group’s cash cow,” he said on Monday. It is the revenue and cash generated by cinemas that is used to pay the debts of construction entities. »
A 13-week forecast predicts cash flow of 1.3 million from cinema operations. After payment of the various costs, a surplus of $320,000 would remain in the coffers.
Responsible for movies, not dollars
Based on these figures, the receiver proposes to leave CEO Vincent Guzzo and his staff in charge of the cinema operations.
The boss will, however, have to stop using money from the big screen to bail out other subsidiaries, warns the receiver.
“All cinema revenues will be used to pay cinema expenses,” explained Jean Gagnon, Dominic Deslandes’ partner at Raymond Chabot, who replaced him in court on Tuesday.
Above a certain threshold, the profits from this division will be used to repay the group’s debts in other parts of the company. “We are told that cinemas are profitable,” said Jean Gagnon. If there is a lack of liquidity, we will know it fairly quickly. »
Judge Pinsonnault explained that he intended to give the rider a chance. “I would certainly not want to sign an order that would put the Guzzo group in default from day one. »
Contacted by The PressVincent Guzzo did not call back, nor his lawyer Eric Lalanne.
Learn more
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- 8,5 millions
- Claim of Quebec and Ottawa against Guzzo
Request for receivership from CIBC and private lenders against guzzo
- More than 60 million
- Amount demanded from Guzzo by CIBC and its private lenders
Legal mortgages and proceedings before the Superior Court
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