John Scotti Leasing placed in receivership amid vehicle sale irregularities

Location John Scotti Inc., a Montreal-based luxury and exotic vehicle dealer and leasing business, was placed into receivership on April 1, 2026, on application by Bank of Montreal, owed approximately $91 million.

The company operates through its network of Montreal dealerships. Its fleet includes high-end brands such as Lamborghini, Ferrari, Rolls-Royce, and Bugatti, with 853 vehicles reported as of November 2025. The business has relied heavily on a structured leasing facility from BMO, which financed vehicle acquisitions and required repayment upon lease expiry or sale.

Financial distress emerged following a November 2025 audit that revealed significant irregularities in the vehicle portfolio and loan repayment practices. BMO identified 77 vehicles that had been sold without repayment of the associated loans, creating a shortfall that had grown to about $14.7 million by year-end. Additional discrepancies included vehicles registered to third parties, missing inventory, and unexplained disposition proceeds, alongside negative monthly cash flow.

Governance issues compounded the financial deterioration. The company experienced a breakdown in management relationships tied to a family dispute, while intercompany transactions reduced amounts owed to an affiliate by approximately $8.3 million in breach of financing terms. The borrower also failed to deliver required financial statements and exceeded its $500,000 operating line by more than $13.3 million as of March 23, 2026.

BMO’s total exposure reached approximately $90.98 million as of March 26, 2026, including $77.13 million under the leasing facility and significant overdraft excesses. Despite multiple default notices and restructuring discussions, including a requested action plan, the borrower failed to implement corrective measures or secure lender support.

The receivership is designed to stabilize and monetize the vehicle portfolio, particularly as 189 leases were set to mature between March and July 2026, requiring coordinated recovery, remarketing, and repayment efforts.

Deloitte is the receiver. Counsel is BLG for BMO, and Fishman Flanz for the receiver.