After a year of court-supervised insolvency restructuring, Laurentian University’s president has given some timelines for what could be the beginning of the end of LU’s journey under the Companies’ Creditors Arrangement Act (CCAA).
Laurentian was recently granted a stay of proceedings protecting it from its creditors until May 31 of this year.
In his Feb. 15 report to Laurentian’s senate, LU president Robert Haché said that when the university returns to court in May, it expects to present a request to the court for a “meeting order.”
He explained that a meeting order is the order that authorizes Laurentian to schedule a meeting of creditors to vote on a formal plan of arrangement, which would set out the terms under which they’d be paid out by LU.
Haché explained to members of LU’s senate that after the May 31 court date, there would be a six-week notice period for that meeting, “and then there’s a few other things that need to happen, but it clearly puts a timeline to the end of the CCAA process and the successful emergence of Laurentian from the CCAA process.”
In his written report, Haché called the meeting with creditors “a critical milestone step in our exit from the CCAA proceedings.
“There is a great deal of work to do between now and May to have a Plan of Arrangement that will receive the support of our creditors, but we are all committed to doing what it takes to meet that milestone,” he said.
Haché also gave members of the senate updates on a couple of consultants’ reports related to Laurentian’s restructuring.
He said the review of the university’s real estate done by the consultants Cushman and Wakefield has been completed and submitted to Laurentian.
While he did not say whether or not the real estate review would be made public, Haché has previously told Sudbury.com he did not expect it would be.
At the Feb. 11 Laurentian board of governors meeting, members of the Coalition for a Liveable Sudbury made a presentation on the importance of preserving the greenspace on campus for the community.
Haché noted that there has been a lot of interest in the real estate review, which is looking at what LU assets could potentially be “monetized” as the university continues its insolvency restructuring.
“So I do want to emphasize with the real estate review that the first emphasis is to identify what Laurentian University needs to be successful and sustainable going forward in the future,” the university president said.
“Only thereafter if there are genuine opportunities to monetize certain assets, that those opportunities be investigated.”
The real estate review produced by Cushman and Wakefield is “thorough” and "fulsome," Haché said, but added that “there is nothing on sale tomorrow.”
He said there will be a process for any real estate sales that will involve the creditors as well as the province (which now holds Laurentian’s $35 million debtor-in-possession — or DIP — loans taken out during restructuring).
“The first and foremost consideration and all of this is what the assets that the university needs to be successful as it emerges from the CCAA process,” Haché said.
Another report by consultants, Nous Group in this case, is also now complete. This report looks at the university’s operations and governance.
Haché said that members of the Laurentian senate will get a look at the operational and governance report at an in-camera meeting, which he expects will take place on Thursday of next week.
The operational and governance report will then be made public, within days of the senate getting its first look at the report, he said.
“We look forward to engaging with our stakeholders as we discuss the findings and recommendations arising from the operational and governance reviews, as we committed to do some months ago,” he said, in his written report.
“Creating a Laurentian that will be financially sustainable and able to withstand changes in the sector today, and in future, will require reflective analysis and collaboration with all of our partners.”
Haché said he expects the governance recommendations will take “many, many months” to implement, and the operational recommendations will likely take more than a year.
He said the changes being recommended will be under scrutiny by Laurentian’s DIP lender (which is now the province), as well as its creditors.
Senate member Shannon Bassett said that she would expect that given the DIP lender is now the province, it would have overarching goals for the betterment of the educational institution.
However, she had concerns about the role of the creditors, whose sole goal would be recouping their money.
Haché said there is a creditor interest in the university’s survival, as they will receive a “better return” if the university is successful. “So I think from that perspective, they can be expected to be a positive force in this discussion,” he said.
A number of members of LU’s senate took issue with other stakeholders seeing the Nous Group report before the senate.
That includes the university’s board of governors and labour partners, including the Laurentian University Faculty Association (LUFA) and Laurentian University Staff Union (LUSU).
“You know, it's been released to the board, why wasn't it released to senate at the same time or shortly thereafter?” asked senate member Christina McMillan-Boyles. “I think that's highly problematic in terms of the bicameral nature of the university.”
(Bicameral refers to the governance structures of universities in Canada, which involves a senate that makes decisions on academic matters, while the board of governors makes decisions on financial matters).
Haché said the timing of who would see the operational and governance report was set out last April in term sheets between the unions LUFA and LUSU and the board of governors.
“One can absolutely say that at the time, you know, somebody on either side of that conversation could have suggested that perhaps senate should be consulted as well at the end of it,” he said. “Unfortunately, that did not come up and did not end up in the agreement.”
Senate member Ernst Gerhardt said he found it quite disturbing that LU’s senate was “so easily forgotten in negotiations.”
Gerhardt said he took issue with Haché’s characterization of the situation that senate had asked for an advanced preview of the Nous report.
“In fact, it was a request to see the report as one of the two bicameral governing structures of the university,” he said. “It was not a request for a polite preview.”
“If preview was, was a way of saying it that was perceived to be inappropriate by senators, I will certainly retract that,” Haché said.
Heidi Ulrichsen covers education and arts and culture for Sudbury.com.
