Divvy Supplier's "Doors Still Open" Amid Bankruptcy Filing

“It’s business as usual,” PBSC spokesman said

By Phil Rogers
|  Tuesday, Jan 21, 2014  |  Updated 11:10 AM CDT
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A spokesman for Public Bike System Company (PBSC), the entity that supplies bicycles, docking stations and software for Chicago’s Divvy bike-sharing system, stopped short Tuesday of predicting that his company will be able to supply Chicago’s ambitious expansion plans.

“As of this morning, our doors are still open,” Sabrice Giguere, PBSC spokesman, told NBC 5. “It’s business as usual.”

Asked about whether PBSC would be able to comply with Chicago’s plans to add 75 new stations in the spring, Giguere wouldn’t speculate.

“Our representatives are going to sit down in the coming days and talk about the different scenarios,” he said. “Long term-wise, when we get to that bridge, we will cross it.”

On Monday, Montreal Mayor Denis Coderre announced that PBSC, known locally as Bixi, will file for bankruptcy, with the city of Montreal taking over Bixi’s Montreal assets.

Montreal has pumped millions into Bixi, starting with a $37 million loan and a guarantee of an additional $11 million, $6.4 million of which has already been tapped. But Coderre said in a statement on Tuesday that Bixi cannot meet its financial obligations and that Montreal taxpayers will assume no further financial risks in the company.

“Our duty is to protect the interests of Montrealers, and this is what we are doing today,” Coderre said.

Fueling the company’s slide into bankruptcy was a decision by various clients, including the City of Chicago, to withhold large payments totaling $5.6 million, the statement said. Bixi reportedly owes its suppliers about $9 million. Chicago reportedly withheld $2.6 million.

Canada’s CBC News says Bixi owes a total of $50 million to various creditors.

“Injecting additional funds to maintain [Bixi] was out of the question,” Coderre said. “If Bixi can be saved, it is through the Bankruptcy and Insolvency Act.”

In November, Mayor Emanuel’s office announced plans to use a $3 million grant to add 75 more stations, byond the 100 already planned for installation in the spring. To date, the United States Department of Transportation has already sunk about $25 million into Divvy’s infrastructure. There are currently 300 stations in operation in Chicago.

When he made that announcement, Emanuel noted that in the four months since Divvy launched it had provided 650,000 trips to Chicago residents, who had already logged 650,000 trips over 1.5 million miles. Divvy has sold more than 125,000 daily passes in Chicago and 11,000 annual memberships.
 

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