Group Catania: the City will be able to recover that $ 6 million

Groupe Catania: la Ville ne pourra récupérer que 6 millions $

MONTREAL – The City of Montreal demanded nearly $ 29 million to the Group Catania, but it will likely have to settle for $ 6 million, without which the business could declare bankruptcy.

This sum was a compensation for the damage arising from the participation of the alleged Group Catania to schemes of collusion and rigging of municipal contracts.

After failing to get the money back with a claim filed in 2014, the City had no other choice than to turn to the courts to recover a sum calculated to amount to $28.8 million.

The company, in bad financial shape, had proposed a plan of arrangement with its creditors.

A sum of $ 5 million could be shared between the City of Montreal, City of Longueuil, the Canada revenue Agency, the Agency of revenue of Quebec, as well as other creditors.

Of this sum, Montreal would receive $ 2.9 million. In addition, it could keep the amounts owed to the Group Catania, representing $ 3.1 million that must be paid for work performed at the drinking water plant of Pierrefonds and on the project in Faubourg Contrecoeur.

The lawyers of the City have suggested to accept the plan of arrangement, which was to recover $6 million.

“The precarious financial situation of the companies in the Group Catania (they are currently insolvent) does not foresee in the near future and actually making a better financial proposal than the one presented today by the controller (6 063 477,26 $, approximate),” explains the legal affairs Department of the City, in the document submitted to the executive committee and approved, in closed session, on 10 June.

The result of the vote on the plan of arrangement, which took place on 12 June, is expected to be formalized on 19 June.

If the plan of arrangement is accepted on the 19th of June, the City would receive “a very significant amount of money in a bankruptcy context, which would allow to close a file involving a major player in the system of collusion and rigging of municipal contracts made during the Charbonneau Commission,” says the document of the City.

It explains that a rejection of the plan of arrangement would lead to the Group of Catania in the bankruptcy, so that the City would be difficult to compensate monetarily then. In addition, set the folder allows you to avoid a long legal saga.

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