Laurentian University is expected to go to court Jan. 27 to ask for protection against its creditors to be extended until May 31.
The “stay of proceedings” protecting Laurentian against its creditors currently expires Jan. 31.
The university’s president, Robert Haché, revealed this information in his written report to the Laurentian Senate, which held its monthly meeting Jan. 18.
After filing for insolvency nearly one year ago, on Feb. 1, 2021, Laurentian continues to undergo court-supervised insolvency restructuring.
Haché said “detailed materials in support of the requested stay extension will be served on all parties in the CCAA proceeding on Jan. 20.”
The documents will also be filed with the court and posted on the website of Ernst & Young, the court-appointed monitors of Laurentian’s restructuring efforts, and will be “publicly available for all to see.”
Sudbury.com will bring you a report on what those filings say once they are loaded to the Ernst & Young website.
Haché also indicated at the Senate meeting that court filings associated with the request for the extension of the stay of proceedings will go into details about the terms of the province taking over loans Laurentian has incurred as part of its insolvency.
Those debtor-in-possession (DIP) loans are worth $35 million.
As part of last month’s financial package from the province, the province said it would provide up to $35 million to refinance the existing DIP financing made available within the CCAA proceeding.
That is, to replace the existing $35-million loan that Laurentian has with Firm Capital Corporation, with a new $35-million loan from the province.
The province also expressed an intention to replace the DIP Facility with a long-term loan upon Laurentian’s successful emergence from the CCAA proceeding following a Plan of Arrangement that has been accepted by creditors.
The topic of the new provincial loan replacing the $35-million DIP loan was brought up at the senate meeting by Laurentian University Staff Union (LUSU) president Tom Fenske, who wanted to know its terms.
The DIP lender has previously put conditions regarding certain aspects of Laurentian’s restructuring on its loans.
“So is there a condition of the government's loan that we would have to go to them to get permission (to make changes at the university)?” asked Fenske.
“Or is that as of Feb. 1, we’d no longer be restricted for changes at this institution with the government as we were with the DIP lender?”
Haché said he didn’t have the terms and conditions of the provincial loan that is replacing the DIP loan in front of him, but said “suffice it to say that the province has assumed the DIP loan with many of the same terms and conditions.”
He recommended that Fenske read the court filings when they’re released Jan. 20. “ I believe you'll find that the conditions have not changed that much,” Haché said.
As has previously been reported, one of the conditions of the province’s financial package has been the recent shakeup of Laurentian’s board of governors.
A number of people resigned last month from the board of governors, including chair Claude Lacroix, and there have been new provincial appointments.
One of those new appointees, Jeff Bangs, a consultant with close ties to the Ontario PC Party, has been named the interim chair of Laurentian’s board of governors.
Haché also gave an update on the university’s restructuring efforts in his report. He said the upcoming necessary steps include:
- The monitor’s (Ernst & Young’s) review and determination of all claims filed against the university with input from the Laurentian team, and the determination of any disputed claims by the court-appointed Claims Officer or the Court.
- Engaging in negotiations with creditors around the terms of a Plan of Arrangement (in which creditors would be paid out) to be voted upon.
- Considering and engaging with stakeholders on the recommendations arising from the operational and governance reviews undertaken by the Nous Group (Laurentian’s consultants on the operational and governance reviews) -- on this point, Hache said that Ernst & Young “advises that the Nous reports on the operational and governance reviews are now complete,” so he anticipates “further information relating to those reports will be available very shortly.”
- Considering the recommendations in the real estate review of Laurentian’s holdings (undertaken by more consultants, Cushman and Wakefield) and actioning any items.
- Finalizing the audited financial statements for the year ended April 30, 2021.
- Preparing and refreshing the financial forecast.
- Addressing the new relationship with NOSM in view of its independence as a standalone university, including its use of Laurentian-owned buildings in future and the financial terms that will apply.
