After Groupe Sélection’s Réal Bouclin, another major Montreal real estate developer is on the brink of collapse as its companies racked up hundreds of millions of dollars in debt.
Unknown to the general public, entrepreneur Ronen Basal is behind a dozen large-scale rental housing developments in the greater Montreal area.
Screenshot, Facebook
Ron Basal. entrepreneur
It was he in particular who oversaw the construction of a 127-unit building in Brossard on the site where the Tour Tysel was originally intended to stand by developer Tyronne Candappa, who never lifted the ground.
“We wanted to grow too fast. […] We had 350 employees,” he lamented when he met at a restaurant on the edge of Montreal’s Décarie Boulevard in December to explain his difficulties.
He does not hide it: He is now considering personal bankruptcy.
Its companies owe Revenu Québec more than $30 million and are the subject of a tax investigation suspected of a scheme.
Photo Chantal Poirier
Revenu Québec seized a $2 million home in Côte-St-Luc in May as part of a case against Ron Basal.
Debt of $276 million
Recently, one of his companies filed for legal protection. It has announced its intention to propose debts totaling $276 million to its creditors in this case alone.
Since 2018, six other of his companies have gone bankrupt.
Even a $1.6 million chalet that Basal owns in Saint-Donat in Lanaudière is on the verge of being taken over by a bank, according to him.
Several creditors, including a private lender, and individuals are suing him in parallel.
Both of his parents, Baruch and Judith Basal, who hold positions in the companies, announced in August their intention to propose to their creditors. Their combined debts total $23 million.
Photo provided by a journalistic source
A $1.6 million chalet owned by the Basal family in Saint-Donat is to be repossessed by a creditor, according to organizers.
“They Killed My Family”
Ronen Basal, sitting in the restaurant, criticized Revenu Québec’s work, which he said had aggravated its financial woes by withholding expected payment of amounts (GST and QST refunds) and making its lenders nervous.
“They killed a family. […] They washed me out with penalties and interest,” he said.
“The aim is to sell the properties in order to have money for the secured creditors and to free up an amount for the ordinary creditors,” explained Gaetano Di Guglielmo, senior vice president of MNP, in charge of the restructuring file for one of the companies.
“One of the things he owes to a secured creditor, Romspen, I think it’s $230 million,” he explained.
BUILDINGS CONSTRUCTED BY THE SURVEYED COMPANIES
1st street 7070 Côte-St-Luc
2. 6700, The Avenue, Côte-St-Luc
3. 6710 Côte-St-Luc street
4. 6250 Lennox Avenue, Montreal
5. 10 150 Saint Laurent Boulevard, Montréal
- Building with 126 residential units
6. 5792 Parkhaven Avenue, Côte-St-Luc
- Building with 112 residential units
7. 8115, boul. du Saint Laurent, Brossard
- Building with 127 residential units
Revenu Québec suspects a conspiracy
The numerous bankruptcies of his companies are currently attracting the attention of the tax authorities, who suspect a stratagem (scheme in English) in progress.
Under the scheme outlined by Revenu Québec, several Basal companies claimed substantial GST and QST refunds from the tax authorities before going bankrupt and transferring their real estate assets to other companies.
They therefore did not pay the taxes to be paid upon completion of the real estate projects, the tax authorities claim.
Revenu Québec raided the downtown offices of trustee Litwin Boyadjian in May and seized Basal’s private home in Côte-St-Luc, court documents show.
” Company [de Basal] owe Revenu Québec more than $30 million for GST and QST, Québec corporate taxes and employer withholdings,” the tax authorities argue in a document filed with the Canadian Tax Court.
Ongoing investigation
In an interview, Ronen Basal denied doing anything illegal and said his main lender, Romspen, effectively took control of his companies after his troubles began.
A Revenue Quebec investigator said he viewed Romspen’s 2020 annual report, which showed that a loan to a bankrupt Basal company would have yielded a 5.6% return for the lender.
Romspen did not respond to an email.
“As a case is currently under investigation, we have no information of a public nature to share with you,” a Revenu Québec spokesman said in an email.
- Ronen Basal worked in the diamond industry before moving into real estate. Revenu Québec alleges in a lawsuit that Basal family businesses were forced into bankruptcy in 2013 after millions of dollars worth of diamonds went missing. However, in an interview, Mr. Basal fiercely denied this version of the facts.
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