Just for Laughs protects itself from its creditors | A face called to transform

The face of the Just for Laughs Group as we know it may change. This Quebec flagship of humor, which has sheltered itself from its creditors, owes several tens of millions to its lenders and suppliers, including 15 million to its former manager and founder, Gilbert Rozon. There is no guarantee that the fallen businessman will recover this sum.



The company founded in 1983, which lost more than 5 million in 2023 according to our information, placed itself under the protection of the Bankruptcy and Insolvency Law, Tuesday, citing disruptions attributable to the COVID-19 pandemic, inflationary pressures and difficulties in the media industry. This provoked an avalanche of reactions in the political and cultural spheres. In the immediate future, the group is cutting 70% of its workforce – 70 people – in addition to canceling the Just For Laughs/Just For Laughs festival scheduled for next summer and seven other shows.

INFOGRAPHICS THE PRESS

Divisions of the Just for Laughs Group

The announcement also sets the stage for a process of solicitation for investment and sale (PSIV), which means that the company, present in niches such as festival organizing and television production, could be sold entirely or in spare parts.

“Commercial activities should survive, but not in this corporate entity which carries far too much debt,” confirms trustee Christian Bourque, of the firm PwC, responsible for judicial restructuring, in a telephone interview with The Press.

At this point, the possibility of anyone recapitalizing the company in its current form seems unlikely to me.

Christian Bourque, from the PwC firm

Mr. Bourque and his team will supervise the PSIV.

Before the pandemic, the Just for Laughs festival and its English-speaking component generated economic benefits of around 34 million as well as tax revenues of 6 million for governments.

Millions in pain

Just for Laughs has debts of around 42 million from several dozen suppliers, according to documents prepared by PwC that The Press was able to consult. There are three secured creditors: the National Bank (17 million), the Business Development Bank of Canada (1.9 million) and the Cultural Enterprise Development Corporation (2.5 million). The sums raised by selling company assets will be used to reimburse these three organizations as a priority.

PHOTO ROBERT SKINNER, THE PRESS

Just for Laughs head office, Saint-Laurent Boulevard, in Montreal

Other claims are unsecured. This means that several suppliers risk leaving money on the table. According to court documents viewed by The Pressthe highest outstanding amounts concern the Cartier Communication Marketing agency ($720,350) and Équipe Spectra ($611,000).

This Just for Laughs debacle could also cause Gilbert Rozon to lose money, even if he has not been in the picture since 2018, after he sold his company for 65 million in the wake of accusations of sexual misconduct that sparked a heated controversy in addition to damaging the group he founded.

According to our information, the businessman is still waiting to receive 15 million – an unsecured debt – following the sale five years ago.

This is a balance of payment. It is the sales process that will determine what Mr. Rozon can recover. In a response sent to The Pressthe businessman says he has “no comments” to make on this matter.

Gilbert Rozon directed our questions to Bell and evenko, who respectively own 26% and 25% of Juste pour laughs. The remaining 49% was acquired by ICM Partners, since bought by Creative Artists Agency. Shareholders have not commented on the turn of events. In 2018, The Press reported that half of the sale price had been shared equally between Bell and evenko, owned by Groupe CH. This represents a little more than 16 million for each Quebec shareholder.

Read the article “Bell and Groupe CH become partners of Juste pour laughs”

Under pressure

The coffers of the Quebec comedy giant were dry. Its board said it had “considered all possibilities”, adding that the restructuring was inevitable due to the state of the company’s finances.

“The decision (…) was made after a thorough review of all available options, taking into account the very difficult financial situation of (Just for Laughs), and considering the significant changes that have occurred in the entertainment sector over the last few years. years,” the company said in a statement.

Just for Laughs blames its debacle on the inflationary surge following the pandemic – during which it was forced to “cease (its) activities for two years” – which significantly increased its expenses. Additionally, change in the media industry has meant lower budgets and “streaming platforms have made television production more difficult,” the company says.

It was not possible to speak with members of senior management, which remains in place during the court-supervised restructuring. Patrick Rozon, head of the creative department, declined our interview request, inviting us to ask our questions to the public relations firm National. Reached by telephone, former president and CEO Charles Décarie, who said he left the organization “several months ago already,” responded that he preferred not to comment on the situation.

Remember that Just for Laughs received 3.25 million in subsidies from the Legault and Trudeau governments to organize its festival last summer. The group hopes to be able to present its flagship event next year, but cannot guarantee it at the moment.

The story so far

  • October 2017: Gilbert Rozon is accused of sexual misconduct by around ten women. He subsequently received an absolute discharge.
  • December 2017: Unsuccessful negotiations take place with Quebecor.
  • March 2018: ICM Partners – now owned by Creative Artists Agency – and producer Howie Mandel buy Just for Laughs.
  • May 2018: Bell and evenko become shareholders. Together they own 51% of the group.
  • March 5, 2024: Just for Laughs takes shelter from its creditors and cuts 70% of its workforce.

With the collaboration of Stéphanie Morin, The Press

Learn more

  • 1985
    Year when the English-speaking component was added to the Just for Laughs festival.

    just for Laughs


reference: www.lapresse.ca

Leave a Comment