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Courts OK Laurentian’s insolvency plans, reject arguments from federated universities

LU gets another $10M interim financing loan, is allowed to cut ties with its federated universities
Laurentian University.

The courts have given their approval to Laurentian University’s restructuring plans, allowing it to continue to operate until at least the end of August.

After declaring insolvency, Laurentian University has been undergoing court-supervised restructuring under the Companies Creditors’ Arrangement Act (CCAA) since Feb. 1.

The court decisions clearing the way for Laurentian were issued by Chief Justice Geoffrey Morawetz and Justice Cory Gilmore late Sunday, ensuring that the first day of LU’s spring term classes can go ahead today.

Laurentian was in court last week, asking for a stay of proceedings protecting it from its creditors until Aug. 31, along with the approval of a further $10 million in debtor-in-possession (DIP) interim financing loan to bring it through to the end of the summer (on top of a previous $25 million DIP loan) and recent cuts to its unionized employees.

The DIP loan also had as one of its terms the severing of ties with Laurentian’s three federated universities. Laurentian said it needs the roughly $7 million per year that is transferred to the federated universities, and is able to educate the students who take courses at these institutions in-house.

Two of those federated universities, Thorneloe University and the University of Sudbury, were also in court last week, fighting those plans.

However, motions brought forward by Thorneloe and the University of Sudbury to disrupt Laurentian’s plans regarding federated universities were denied by the courts.

Morawetz and Gilmore said the reasoning for their decisions will follow.

The second phase of Laurentian’s restructuring lasts until the end of the summer, and will include a review of its real estate to determine if its assets can be “monetized,” as well as a plan to deal with its creditors.