The insolvent university has been granted another extension of creditor protection, this time until September 30, as it works on a creditor repayment plan
A judge has again granted permission to extend the stay of proceedings protecting Laurentian University from its creditors, this time until September 30.
Laurentian has been in insolvency restructuring for over a year now after declaring insolvency and filing for creditor protection under the Companies’ Creditors Arrangement Act (or CCAA) in early 2021. Speaking at the May 30 hearing where Laurentian made the request, the university’s insolvency attorney, DJ Miller, said the latest stay extension “represents the home stretch in Laurentian CCAA restructuring.”
The university has entered into negotiations with its creditors as it prepares to reach a plan of arrangement.
A plan of arrangement is essentially a plan proposed by an insolvent organization to pay off its creditors, and it must be approved by those creditors.
Laurentian the intention had been to seek a “meeting order” for his creditors to vote on a formal plan of arrangement by May 31, which was the previous expiry date of the stay of proceedings before the hearing of Monday. However, the university said it needed more time to work on a plan of arrangement, given the province’s offer earlier this month to buy some Laurentian assets for 53 .5 million dollars. These funds would be made available to creditors under the CCAA plan of arrangement. Chief Justice Geoffrey Morawetzwho presided over the Laurentian case on Monday, because he has most of the hearings related to READ insolvency, asked if the $53.5 million had been allocated to specific parcels of real estate.
Miller said negotiations are ongoing with the province, “but those specific properties have not been identified, and that’s a discussion that will take place in the future.”
However, court documents filed by Laurentian indicate that the university requested that the two buildings occupied by NOSM The University – the Health Sciences Education Resource Center and medical school building – be considered by the province “on a priority basis in discussions and as conversations progress in this regarding the Province’s purchase of identified real estate assets from LU”. NOSM The University’s medical school, formerly known as the Northern Ontario School of Medicine, became an independent degree-granting institution of Laurentian University earlier this spring as part of the spinoffs from Laurentian insolvency. Regarding next steps, Miller said “the next few weeks are going to involve quite an intense effort in terms of negotiating the language of the CCAA plan with key stakeholders. ” CCAA plan to its creditors.
“And so, assuming that timeline, that would put them in a meeting of creditors to vote on a plan to be held around the middle or end of August, assuming there are no delays unexpected in this timetable, and in order to give creditors sufficient time. time to review the terms of the plan they are being asked to vote on.
“And then, provided the plan is approved at the meeting of creditors, then a motion for a sanction order will be made reasonably soon after that meeting of creditors.
“And then, of course, the implementation of the plan would come as soon as the conditions for implementation were met.
“Some of the conditions for implementation obviously would be things like having exit financing in place, which replaces debt financing, and that sort of thing. It is therefore the roadmap and the timeline we are working diligently on.” ready for the realization of a CCAA plan. “Suffice it to say that there is ongoing and very regular dialogue and discussions with the mcu (Ontario Ministry of Training, Colleges and Universities),” Miller said, regarding the exit financing mentioned above, the purchase of Laurentian’s assets, and more. Ashley Taylor, attorney for Ernst & Young, the firm acting as monitor of Laurentian insolvency restructuring, said the comptroller supports the request for an extension of the stay of proceedings because it is necessary for the university to complete its restructuring.
“We see the extension should reassure university stakeholders, including current and new Laurentian students, who are obviously a critical stakeholder,” Taylor said.
“Finally, in the view of the Monitor, the Plaintiff is acting in good faith and with diligence.”
The extension of the stay of proceedings was not the only issue addressed at Monday’s hearing.
Laurentian University and the University of Sudbury also entered into an agreement regarding the funding and administration of the pension plan for current and former employees of the U of S following the termination of the agreement with READ former federated partners in 2021.
Details of this agreement are available in the court’s motion documents.
Chief Judge Morawetz also ratified this agreement during the May 30 hearing. A pension agreement was reached with another former federated university, Huntington University, a year ago, while the third former federated university, Thorneloe University, did not reach such an agreement. Those present at Monday’s hearing also learned that a June 16 hearing date is currently scheduled to deal with a Laurentian insolvency involving the Art Gallery of Sudbury.
However, Taylor said “efforts are underway to make this motion unnecessary.”
Chief Judge Morawetz also told those present at Monday’s hearing that he would be unavailable for three weeks beginning June 24 as he will be “out of jurisdiction.”
“If it is necessary to proceed in my absence, I will appoint another judge from the trade list to hear the cases, although I would prefer to hear them myself,” he said. “But unless I can find my way to Canada House in London, it might be difficult.”
Heidi Ulrichsen is the Associate Content Editor of Sudbury.com. It also covers education and the arts scene.