IT'S AN ALMOST laughable snarl to an already fraught process: Just as Portland officials say they're on the verge of snagging millions in hard-won sponsorship money to buy a bike-share system, the company that's supposed to supply the equipment has gone bankrupt.

On January 20, Montreal-based Public Bike System Company (PBSC, often called Bixi), announced it was seeking protection under Canada's Bankruptcy and Insolvency Act—a move akin to reorganizing under Chapter 11 bankruptcy in the United States.

The company is in a $46 million hole, with the vast majority of that money, more than $31 million, owed to the City of Montreal, where Bixi got its start. So when Montreal Mayor Denis Coderre demanded the company seek bankruptcy protection—he could have seized PBSC's assets instead­—it had no choice.

PBSC will still provide bike share to the citizens of Montreal, officials say. But "every effort will be made to sell Bixi's international activities," a city councilman said in an announcement of the filing.

That's easier said than done. Past efforts to sell the company's international wing have fallen through because of PBSC's precarious finances. The company's bikes and docks are a popular choice these days—it supplied huge systems in New York City and Chicago recently—but business has been hurt by delays and issues with software.

So the bankruptcy doesn't inspire a lot of hope for the future of Portland's bike share. Not that you'd know it from talking to the folks trying to launch the program.

"Ultimately, we are confident that this will be a positive result for Portland," said Mia Birk, vice president of Alta Bicycle Share, the Portland outfit tapped to launch bike share here and in cities including Seattle. "Our 2014 system will launch as planned."

Talking to representatives of PBSC, as well as to the Canadian firm guiding PBSC through the bankruptcy process, it's hard to see where Birk's confidence comes from.

Even if a sale goes through—potentially at a very cheap price—there's no saying how a new owner will operate the company, or even that prices for equipment will remain the same.

That could have ramifications for Portland, where Alta's been working for about a year to find roughly $5.5 million to purchase a system and operate it for five years. The cash has been hard to come by. And even as Birk and Portland Bureau of Transportation (PBOT) officials say we're close to a deal, they're assuming the city may have to loan the system money.

"Obviously the process we've embarked on has raised some concerns from various people," says Raymond Massi, a partner at the financial services firm Richter, which is handling the bankruptcy. "The idea is to try to complete the sale process, and there are a number of people interested."

PBSC, meanwhile, isn't saying anything useful. Asked whether the company will be able to supply bikes in the near future, spokesman Fabrice Giguère bizarrely referred questions to Alta.

"As of today, we're open for business," Giguère said on January 23. "I understand your state of mind, but people are going to sit down. We have to let them sit down and talk about different scenarios."

Commissioner Steve Novick is concerned enough by PBSC's tenuous future that he's directed senior PBOT officials to keep him apprised.

"I share your desire for clarity," Novick wrote in an email to the Mercury.

In the meantime, PBOT is still focusing on finding money.

"While many companies across many industries operate while in bankruptcy, there are legitimate concerns about how PBSC will operate," the bureau said in a statement to the Mercury. "While those logistical issues are being worked out, the city remains focused on closing a deal with our title sponsor, the key milestone we need to be able to launch the Portland bike-share system."

Well, that and a source of bikes.