A BMO-led group of lenders to Montreal-based luxury fashion retailer Ssense has asked Quebec Superior Court to block the company’s founders from buying out the business, Postmedia reported.

The lenders argue that a liquidation would deliver a better recovery for creditors, according to the report.

The move comes less than a week after Ssense’s co-founders said they had won court approval to proceed with a restructuring that would allow them to retain control of the company.

Brothers Rami, Bassel and Firas Atallah sought bankruptcy protection last summer, enabling Ssense to continue operating while it developed a court-supervised plan to repay its debts.

In a recently filed contestation notice, lawyers for the Bank of Montreal said the lenders should not be forced to accept a transaction that would discharge secured claims for consideration “substantially below the value of the assets,” particularly when liquidation could offer a “significantly better economic outcome,” Postmedia reported.

The notice, prepared by Borden Ladner Gervais LLP, calls on the court to dismiss the founders’ application and approve a liquidation sale instead, adding that the proposed buyout is not “appropriate, fair, or reasonable,” Postmedia reported.

According to the filing, Ssense owes its lending syndicate more than $113 million.

Once valued at about $5 billion in 2021, the online retailer has struggled since the post-pandemic slowdown in e-commerce.

Ssense did not respond to a Postmedia request for comment before publication of the report.

Pictured: Mannequins in a Ssense store.

Photo: Ssense