MONTREAL – The City of Montreal has forced its public bicycle sharing service to seek bankruptcy protection.
Mayor Denis Coderre made the announcement at a press conference on Monday afternoon.
“The decision has been carefully considered . . . injecting additional funds to maintain the Societe de velo en libre-service is out of the question,” he said.
“If BIXI can be saved, it is through the Bankruptcy and Insolvency Act.”
According to the mayor, BIXI services in 2014 will not be affected and those who have purchased BIXI memberships will be able to use the service as soon as the season opens.
BIXI has operated its popular bike-sharing service in Montreal since 2009 and the news of its bankruptcy was met with disappointment and disbelief by many Montrealers:
The bike-sharing company owes the City of Montreal $31.6 million, a sum that does not include an additional $6.4 million on a line of credit guaranteed by the City.
The company ran into financial difficulties due to its international expansion; foreign customers such as New York City and Chicago owe BIXI $5.6 million.
Mayor Coderre confirmed that on Jan. 15, the City of Montreal requested that BIXI pay the money it owed.
The company then filed for bankruptcy protection on Jan. 20.