02/03/2014 16:16 EST | Updated 04/05/2014 05:59 EDT

Shakeup at Bixi costs acting CEO Michel Philibert his job

The acting head of Montreal's Bixi bike-sharing service, Michel Philibert, is among the employees laid off today, in a surprise move that comes two weeks after Bixi filed for bankruptcy protection.

Sources confirmed the news, telling CBC's French-language service that Bixi employees had been let go for financial reasons and not because of any wrongdoing.

Reached by CBC News by telephone this afternoon, Philibert sounded as though he was holding back tears, however, he refused to be interviewed, referring a reporter to Bixi's media relations officer.

Bixi's media relations officer, Fabrice Giguère, said, "I'm no longer with Bixi," and referred CBC back to the non-profit company's main line before hanging up.

Bixi bonus scandal

Last week,Philibert defended Bixi's 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 Philibert.

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

Still, Projet Montréal leader Richard Bergeron called the move "scandalous," and Montreal Mayor Denis Coderre said Bixi officials should have handled the situation differently – although he acknowledged the bonus payments were perfectly legal.

Montreal took over Bixi's assets

Earlier in January, the company that owns Bixi — the Public Bike System Company, known in French as the Société de vélos en libre-service (SVLS) — filed for protection from its creditors.  It owes $50 million to various lenders, including the City of Montreal. 

Coderre said at the time rather that sinking more money into the SVLS, a private company, the city would take over Bixi's Montreal assets.