Montreal's Festival Mural saved through prepack sale to Multicolore

Les Productions LNDMRK Inc. and Mural filed notices of intention to make a proposal on April 13, commencing parallel restructuring proceedings under the Bankruptcy and Insolvency Act. The filings were paired with an application seeking approval of a pre-negotiated sale transaction involving Multicolore Projets Inc. and an affiliated purchaser, structured as a hybrid asset sale for LNDMRK and a reverse vesting transaction for Mural.

Mural operates the annual Montreal-based Festival Mural, a large-scale cultural event combining mural art, music and digital installations, while LNDMRK functions as its affiliated creative agency and primary service provider, managing artistic projects and representing talent. The two entities share operational interdependence, with LNDMRK acting as producer and supplier for the festival’s programming and execution.

The group’s financial distress emerged over 2024 and 2025 amid declining revenues and mounting losses. For Mural, a shift to a free admission model eliminated ticket revenue and reduced ancillary income streams such as bar sales, directly impairing liquidity. LNDMRK experienced reduced client budgets, lower project volumes, and operational disruptions including staff departures. By early 2026, both entities faced negative working capital and were unable to meet obligations as they came due, prompting temporary layoffs of 11 employees across the businesses.

Creditors include National Bank of Canada, owed approximately $614,000 by Mural and $512,000 by LNDMRK, as well as unsecured trade liabilities exceeding $850,000 across both entities.

Facing acute liquidity constraints, the companies approached Ernst & Young to assist with a compressed sale and investment solicitation process. The process attracted limited interest, reflecting the niche nature of the business and its reliance on ongoing operations to preserve value, with two bidders ultimately submitting binding offers by March 26, 2026. Multicolore’s bid was selected on March 31, 2026 with the support of the secured lender and guarantor.

The restructuring is anchored by two interdependent transactions, which were approved on April 17. First, Multicolore acquires substantially all operating assets of LNDMRK, including intellectual property, contracts, receivables, and goodwill, with consideration paid to the trustee in trust. The transaction contemplates the rehire of a portion of employees and a subsequent bankruptcy filing for LNDMRK following closing.

Second, Mural undergoes a reverse vesting transaction in which excluded assets and liabilities are transferred to a residual entity, while the operating entity continues under new ownership free of legacy claims. The structure preserves key permits, contracts, and relationships required to stage the Festival Mural in June 2026, a central driver of value that would likely be lost in a conventional asset sale.

The purchaser has committed to additional funding, including a projected $200,000 injection to complete ongoing projects and more than $750,000 in anticipated costs to ensure the 2026 festival proceeds. The transactions also preserve a limited number of jobs while facilitating access to the Wage Earner Protection Program for terminated employees.

EY is the proposal trustee. Counsel is Prelia for the companies.