All Guzzo Cinemas may close after court ruling

A Guzzo cinema sign is seen on a store front in Montreal on Tuesday, June 18, 2019. THE CANADIAN PRESS/Paul Chiasson

All Guzzo Cinemas may soon be closed.

The Quebec Superior Court ruled in favour of a court-appointed receivership in 2024, and the receiver says that maintaining operations has “become untenable” and “must be reassessed immediately,” according to a ruling from Justice Michel A. Pinsonnault.

“While theatres do generate revenues, they are clearly insufficient to allow the Cinémas Guzzo Group to meet its current and punctual financial obligations,” the court said.

Several suppliers, the document says, “were not being paid due to a lack of cash.”

Guzzo owes its main debtor, the Canadian Imperial Bank of Commerce (CIBC), substantial amounts of cash, and CIBC alleges that they have no “confidence in the debtors and had objective and serious reasons to fear that their position would deteriorate further if they continued to operate their businesses in a context of chronic lack of liquidity,” the court document reads.

Receiver Dominic Deslandes was monitoring Guzzo Cinemas expenses and receipts and noted “a marked deterioration in the financial situation of the Cinemas Guzzo Group” as of mid-January.

The court said deferring payments “only worsens the financial situation” and that “the snowball is only getting bigger and bigger.”

“The financial hemorrhaging must stop and be replaced by a reasonable and realistic recovery process without creditors worsening their financial position by having to continue providing goods and services that are unlikely to be paid for in full,” the ruling reads.

Guzzo Cinemas CEO Vincenzo Guzzo told CTV News that he was meeting with his finance people and has no comment on the ruling.

The ruling is the latest in a string of bad news stories for the once-dominant Quebec cinema chain. Since November, the chain has closed three locations, including its flagship location overlooking the Metropolitan Expressway in Marché Central.

The court document says that Guzzo made the decision to close those theatres without discussing it with the receiver.

A ruling in December placed the company in liquidation.