Creditors seek $32.4 million from race
Now-shuttered Montréal c’est électrique left assets of no more than $462,000
Montréal c’est électrique’s creditors say they’re owed $32.4 million, but the organizer of last year’s ill-fated Formula E electric car race left assets of no more than $462,000.
The non-profit organization, set up by the city of Montreal, closed shop this month after Mayor Valérie Plante cancelled plans to hold races in 2018 and 2019. She described Formula E, a pet project of former mayor Denis Coderre, as a “financial fiasco.”
Three creditors have come forward, Philippe Jordan, a partner at Pricewaterhouse-Coopers, the court-appointed bankruptcy trustee, told the Montreal Gazette on Friday.
Formula E Operations, the company that puts on the electric car races around the world, says it’s owed $20.4 million.
Evenko, which was hired to run the Montreal race, is claiming $4.7 million.
The city of Montreal says it’s owed $7.3 million.
Two of the claims are higher than Montréal c’est électrique (MCE) listed in its liabilities when it filed for bankruptcy on Feb. 5. At that time, MCE said its creditors were owed $18.1 million, with Formula E Operations owed $9.8 million and Evenko $1 million.
Jordan said he only received the creditors’ claims this week and has yet to review them.
He said it’s not uncommon for creditors to seek amounts higher than the total listed in a bankrupt company’s books. That could happen if, for example, a creditor claims damages for the fact that a contract won’t be honoured as long as originally expected.
Jordan said it will take three to six months to review MCE’s financial activities and determine whether creditors’ demands are justified.
The city is the only secured creditor, meaning it would be paid first.
MCE listed assets of $461,000, though the final figure may be lower.
“It’s certainly not enough to repay what is owed to the city of Montreal and the other creditors,” Jordan said.
After it has completed its review, the bankruptcy trustee will present a report to Quebec Superior Court detailing how MCE assets should be divided. Creditors can contest the trustee’s conclusion in court.
There is nothing stopping creditors from suing the city of Montreal over money they’re owed by MCE, Jordan noted.
Plante has refused to say how much she thinks the MCE debacle may end up costing Montreal.
“We’re still waiting to see how it’s going to evolve,” she said last week.
The July 2017 Formula E race was held on city streets in eastern downtown, snarling traffic for weeks and hurting some businesses.
Undeterred by criticism, Coderre defended city spending on the event, describing it as an “audacious” investment that would raise Montreal’s international profile and make the city a hub for transport electrification.
“It’s going to be a great event. Let’s have fun, let’s be proud again. Montreal is on the map, and it’s an investment for the long term,” Coderre said three days before the race. “If we stopped events whenever there are critics, Expo 67 would never have been held.”
Questions about Formula E finances and ticket sales dogged Coderre during the election campaign.
After refusing to divulge attendance for months, MCE in November said 20,000 of the 45,000 attendees got in for free. This month, the organization admitted the number of free tickets was actually 30,000.