Montreal will appeal ruling that it owes $16M to bike firm
One week after a Superior Court judge ruled the city of Montreal must pay $16 million to the bankrupt company that once managed the trouble-plagued Bixi bicycle service, Mayor Denis Coderre announced on social media the decision will be appealed.
“I am announcing the decision of my administration to appeal the Superior Court decision on the Bixi file,” Coderre, a habitué of social media, announced on his Twitter account late Tuesday morning.
Last week, Coderre told the executive committee the city’s legal department would review the court ruling ordering Montreal to pay $16 million to Litwin Boyadjian, the bankruptcy trustee firm handling the affairs of the Public Bike System Co., which launched the city’s popular but financially shaky bike-sharing service in 2009.
Part of the argument used by lawyers for the bankruptcy trustees was that a $37-million loan provided by the city to Bixi in 2011 was illegal because the city was lending money to a commercial enterprise, which is forbidden under Quebec’s Municipal Aid Prohibition Act.
The city countered the loan was a form of aid provided to Bixi that had been approved by Quebec’s Ministry of Municipal Affairs, and the loan was legal because Bixi was a bike-sharing system and thus a service to society as opposed to a commercial enterprise.
The award the city was ordered to pay last week — which could reach $18 million once interest is factored in — is to go toward covering the costs of unpaid bills to companies who supplied bikes, docking stations and other related equipment for Montreal’s bike-sharing operations.
After declaring bankruptcy in 2014, Bixi has been operated by a non-profit company called Bixi Montreal, which is financed by the city.