A “consensual resolution” has been reached regarding how money owed to employees of the former federated universities and other third parties enrolled in Laurentian University’s retiree benefits plan should be calculated.
In August, a methodology was approved for compensating the estimated 1,200 current, former and retired university employees owed money as a result of the university’s insolvency and restructuring under the Companies’ Creditors Arrangement Act (CCAA).
However, that approval set aside a certain subsection of the employee group, as there was a dispute related to how what they’re owed would be calculated.
Besides the Laurentian employees, also owed money are current and former employees of certain third-party entities who participated in Laurentian’s Retiree Health Benefits Plan (RHBP).
That includes the federated universities — Thorneloe and Huntington universities, and the University of Sudbury — as well as Sudbury Neutrino Observatory, Mining Innovation Rehabilitation and Applied Research Corporation (MIRARCO) and Centre for Excellence in Mining Innovation (CEMI).
Because Laurentian did not establish a separate trust account for RHBP contributions, money paid into the fund by LU was “recorded as a liability” when the university declared insolvency. The RHBP was terminated April 30 as part of Laurentian’s restructuring, thus the money owing to past and present employees of both Laurentian and the aforementioned “third party” participants.
During August court dates related to Laurentian’s CCAA filing, lawyers for the federated universities said non-Laurentian employees who were enrolled in the university’s RHBP were being treated differently than Laurentian employees.
There is concern that the formula being applied to those associated with federated universities and other third parties would result in them receiving less compensation than their Laurentian counterparts.
Negotiations related to this issue continued out of court, and a resolution has now been reached.
Ernst & Young, the firm that’s acting as the court-appointed monitor of Laurentian’s insolvency, addressed the situation in its latest report, filed Sept. 28. The matter is expected to be dealt with in an Oct. 1 court hearing.
“These discussions ultimately concluded in an agreement among LU and the Third Parties with respect to certain amendments to the Compensation Claims Process Order to reflect an agreed calculation methodology,” said the Ernst & Young report.
The report said “the quantification of the RHBP Claims calculated in respect of the Third Party’s current or former employees (including retirees) shall be calculated using the same methodology utilized for LU current or former employees.”
This group of “third party” current or former employees are able to dispute information related to the calculation of what they’re owed until Nov. 15.
Ernst & Young said “the agreement provides a path forward to resolve potential Compensation Claims of the Third Party current or former employees (including retirees) who participated in the RHBP in an efficient manner and avoid costly litigation that will be distracting to LU while it continues to focus on its restructuring.”
