The Canadian Bureau of Investigations, a private security company at the centre of a recent scandal in Quebec, declared bankruptcy on Thursday.
The Montreal-based firm was unable to convince its creditors to accept a proposal to resolve its $14 million debt.
Among the company's investors that stand to lose money are the Quebec government, Movement Desjardins, and the company's employees, who had invested almost $4 million in the company.
The news brings little comfort to 800 security agents, who are owed on average $3,000 each and have essentially been working as volunteers, according to their union.
Last week, the firm PR Maintenance withdrew its offer to buy the company.
The Canadian Bureau of Investigations (BCIA) made headlines earlier this month after former Quebec family minister Tony Tomassi admitted to having used a credit card belonging to the company for his personal expenses. Tomassi was fired from cabinet and kicked out of the Liberal Party caucus as a result.
Questions were also raised about how the company's president, Luigi Coretti, was able to obtain an authorization to carry a restricted or prohibited weapon after his request was initially refused by provincial police.
Coretti, a Liberal Party donor, eventually obtained a temporary permit following a meeting with Quebec Public Security Minister Jacques Dupuis.
Dupuis denied having intervened in the case, but acknowledged that he had asked his chief of staff to speak with Coretti.
Coretti did not appear at a shareholders meeting on Thursday, sending a doctor's note instead.
The union says employees will get some of their money back, thanks to a government program that protects salaries.