01/28/2014 05:46 EST | Updated 03/30/2014 05:59 EDT

BIXI paid out bonuses before filing for bankruptcy protection

Managers at BIXI are defending their decision to hand out hundreds of thousands of dollars in bonuses — just weeks before the company filed for bankruptcy protection.

BIXI paid a total of $232,000 to 39 permanent employees in December, including $14,000 to acting CEO Michel Philibert.

A few weeks later — in late January — the city’s bike-sharing company filed for bankruptcy protection.

Montreal city councillors found out about the bonus payments today and say they’re shocked and outraged.

“It's a real scandal. It's unacceptable. They will have to reimburse us," said Projet Montréal leader Richard Bergeron.

BIXI owes Montreal taxpayers $30 million and other creditors another $20 million.

BIXI says bonuses are legal

BIXI’s CEO Michel Philibert said the payments were written into the employees’ contracts and approved by the board of directors.

He also said that when the bonuses were paid out in December, BIXI managers still believed they could avoid bankruptcy protection.

“It’s not as if we said, ‘We're going bankrupt tomorrow — let's pay ourselves bonuses now,’” Philibert said.

Mayor says city’s hands are tied

Montreal Mayor Denis Coderre said BIXI officials should have handled the situation differently.

“I would have liked to have known, as a creditor, and this was done in December — when we were already looking at the situation for ways to save BIXI. So, it’s not classy,” Coderre said.

Coderre added that it appears the bonus payments were legal, and if they were written into the employees' contracts, there’s nothing the city can do to recoup the money.