A big player in the cinema industry on the brink

The Montreal Solution Highpoint, a major player in Quebec’s cinema and events industry, is going through one of the worst crises in its history behind the scenes, Le Journal has learned.

At the request of the National Bank (BN), the court urgently ordered the appointment of a receiver who has since taken control of the company, fired its CEO and put the company up for sale.

Raymond Chabot’s company, founded in 2007 by entrepreneur Jean-François Dubé, who is recorded in this file as the liquidator, was fully or partially liquidated within a few weeks.

Based in the Anjou district of Montreal, Highpoint specializes in the rental and installation of rigging equipment for film and television studios in the Montreal area.

The film and series teams (X-Men, transformers, Three Pinesetc.) produced by Netflix, Sony and Amazon often require his services.

More recently, it has expanded its offering by hiring stages and infrastructure for major events such as the F1 Grand Prix, the Montreal Jazz Festival or the Quebec City Summer Festival.

Faulty debt and accounting

In March 2021, Highpoint announced it would add the Culture and Communications Investment Fund (FICC) – a rare venture capital fund dedicated solely to the culture industry – to its holdings, as well as funding 4.35 million from the BN.

This cash injection, it said, should allow her to “acquire new equipment and offer a wider range of services for local and foreign productions”. Obviously, the sequel didn’t go as planned. Eighteen months later, the company was struggling with about $15 million in debt, including more than $11 million in debt to BN.

Concerned, the financial institution argued in the Supreme Court that it also found improper withdrawals — nearly $900,000 — made without its knowledge, leading to a significant and rapid deterioration in the company’s liquidity.

The company’s working capital has melted by $2.3 million in the first three months of 2022, according to the bankruptcy trustee’s report consulted by Le Journal.

The latter also bluntly suggests that management kept “misguided accounting” with the result that the lender was misled as to its actual financial performance.

From shareholder to creditor

“I think it’s all a shame. […] Sometimes there are things that you learn after the fact,” responded FICC Managing Director Robert Chartier, stating that he recently withdrew from the stake.

“We are now among the creditors,” he says and does not want to disclose the amount of the expected losses.

Jean-François Dubé, ousted President (with his Vice-President for Finance, Claude Dubé), did not respond to our interview request yesterday. The same applies to representatives of Raymond Chabot.

Investors interested in all or a portion of Highpoint’s assets have until September 12 to come forward. If all goes according to plan, all of those assets — including the contracts — will have found buyers by October.

HIGHPOINT SOLUTION

  • Founded in 2007
  • Founder: Jean Francois Dube
  • Sales volume: $12 million in 2022
  • Among the assets: $19 million for rental equipment, $3 million for trailers, trailers, and rolling stock
  • Warehouses in Montreal, Laval and Quebec

Leave a Comment