Cinémas Guzzo Inc. et al., Interim Receivership

Cinémas Guzzo Inc. et al., which operate a regional chain of movie theatres in Québec, were placed into interim receivership on November 22 on application by CIBC, owed approximately $38.5 million.

Cinémas Guzzo was started in 1974 by Angelo Guzzo, the father of the current President and CEO, Vincenzo Guzzo, after he immigrated to Canada from Italy. It eventually grew to owning 141 screens spread across 10 theatre complexes.

CIBC provided credit facilities to the Guzzo Group in 2018.

Like other movie theatres, the companies faced difficulties during the COVID-19 pandemic.

In 2022, CIBC learned that the companies owed over $750,000 in unpaid taxes to the City of Laval. Although a partial payment was made by the Guzzo Group in order to avoid the forced sale of certain properties, more than $430,000 remained unpaid in July 2023. As a result of this default, CIBC required the Guzzo Group to maintain a reserve for property taxes to protect its secured rights, but the Guzzo Group refused.

The Group has committed various other defaults under the CIBC facilities, including failing to provide annual financial statements and entering into transactions that created unauthorized overdrafts.

The Group also owes approximately $28 million in secured debt to Equitable Bank.

Raymond Chabot is the interim receiver.

Counsel is McCarthy Tétrault for CIBC, Langlois Lawyers for Equitable Bank and Q8/Q12, Fasken for the interim receiver and De Grandpré Chait for the Guzzo Group.