Ultimately, the Mach Group will buy part of the real estate portfolio of Stéphan Huot’s defunct empire for an amount of around $560 million. All that is needed is the court’s consent to proceed, as none of the creditors have raised objections to the proposed order.
• Also read: With a debt of $1.2 billion, fallen promoter Stéphan Huot wants to avoid bankruptcy
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The pact, worth more than half a billion dollars, was presented in detail to Supreme Court Justice Jean-François Émond on Wednesday.
The offer allows for the repayment of senior debts, namely legal mortgages and municipal taxes, as well as payments to the Huot Group’s first and second creditors, i.e. institutional lenders. We’re talking about amounts totaling $11.8 million and approximately $544 million.
This means that the shortfall to cover the total claims of $674 million related to the five real estate projects covered by the transaction is approximately $117 million.
Photo Stevens LeBlanc
These third-tier creditors include the millionaire investors who were recruited to try to save the Huot Group. However, the latter will not lose their entire share since Vincent Chiara, director of Mach, offers them a 20% share in the newly created companies.
No opposition
The resolution presented on Wednesday was once again unanimous among creditors. All that is missing is the consent of the judge Jean-François Émond, who advised the case. However, he promised quick thinking.
This is because the parties want to close the deal by Friday, which would free up the $100 million Mach Group promised at signing for refunds.
Vincent Chiara Courtesy: Jean. S-Cossette
The remaining amounts would then be debited in the coming weeks when the refinancing of the projects becomes active.
“We are confident that this is the best offer we can have and that no creditor can complain that the procedure was not carried out properly,” assured the insolvency administrator Jean Gagnon, recommending that Judge Émond ratify the agreement.
The insolvency administrator also had a word for the tenants of the five complexes affected by the transaction, as well as for the employees associated with them.
To residents, it seems “obvious” that a transaction will benefit them. “You will have an owner with long-term goals, who is much more interesting than a bankruptcy trustee,” Mr. Gagnon emphasized.
As for the employees, of course they cannot be included in a transaction, but Mach Group has confirmed that offers will be sent to them.
Upcoming creditors meeting
Regarding Stéphan Huot and his $1.2 billion bankruptcy, it was announced on Wednesday that a meeting of creditors is scheduled for December 5th. However, its lawyers and the file manager are considering postponing the proceedings due to the transaction with Groupe Mach.
“The transaction will allow for a reduction [d’environ] “Mr. Huot’s debts amount to $600 million,” noted the trustee in charge of the case.
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