The government of Quebec, through Investissement Québec, ultimately paid a little more than 43.6 million to the National Bank to cover part of the losses incurred by the financial institution in the collapse of Groupe Sélection.
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This payment from Quebec, dated May 8, 2024, remained secret until it was revealed in Superior Court yesterday (October 31, 2024), as part of proceedings initiated by personal creditors of Réal Bouclin, fallen founder of the defunct senior living empire (RPA).
We will recall that Groupe Sélection was the largest beneficiary of the Temporary Concerted Action Program for Businesses (PACTE) set up by Quebec to help entrepreneurs get through the health crisis.
As part of this program, Sélection had received at least $272 million in loans from different lenders, accompanied by loan guarantees from Quebec (a promise to guarantee repayment in the event of a company’s inability to do so). ) of up to $60M.
As the liquidation of multiple entities of the group, under the Companies’ Creditors Arrangement Act (CCAA), would not have been sufficient to allow the full repayment of debts of Mr. Bouclin’s company, Investissement Québec would be seen forced to honor its loan guarantee.
The banking syndicate, led by the National Bank in this case, would have received the reimbursement of $43.6 million from Quebec on May 8, according to the applicants’ lawyer, something that it had apparently failed to disclose at the time of the meeting of creditors on May 28.
It was during this meeting that the creditors were called upon to decide on Réal Bouclin’s composition proposal. This proposal, equivalent to the reimbursement of 5% of his personal debts of more than $212 million, was supported in a proportion of 15 votes to three.
More details will follow.
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