A small number of creditors representing a large chunk of Laurentian University’s debt declined to vote at the recent meeting on the university’s plan of arrangement.
Regardless, as reported last month, the plan of arrangement was approved by the university’s creditors.
The detailed results of the plan of arrangement vote are included in the most recent report on Laurentian’s insolvency put out by Ernst & Young, the firm acting as the court-apponted monitor of the university’s restructuring.
(If you’re interested in this section of the report, check out pages 18 and 19, as well as the minutes of the meeting, beginning at page 82).
A plan of arrangement is essentially a plan put forward by an insolvent organization to pay out its creditors, and it must be approved by these creditors.
The Ernst & Young report said 606 affected creditors holding proven claims with an aggregate value of nearly $179 million (specifically $178,893,641) attended the Sept. 14 plan of arrangement vote either in person or by proxy.
A total of 597 affected creditors voted either by proxy or in person at the meeting. However, those creditors held proven claims with an aggregate value of nearly $63 million (specifically $62,937,935).
That means that creditors represented at the meeting owed close to two-thirds of the aggregate value mentioned above (or almost $116 million) did not vote on the plan of arrangement.
Fabrice Colin, president of the Laurentian University Faculty Association (or LUFA), told Sudbury.com following the vote his “educated guess” is that Laurentian’s main creditors, which are major Canadian banks, decided to “abstain from the vote.”
As previously reported, Laurentian’s plan of arrangement passed by a slim margin.
It had to be approved by a majority of the affected creditors who submitted votes. The votes also had to represent at least two-thirds of the total dollar value of proven claims of creditors participating in the vote.
The plan of arrangement was approved by 87.4 per cent of the number of eligible voters who cast ballots, which means the first test was met.
The second test was also met, but by a much narrower margin. Creditors representing 68.9 per cent of the total value of the claims voted in favour, meaning the vote was only slightly over the two-thirds threshold.
Asked about this narrow margin following the vote, Laurentian board chair Jeff Bangs said, “I can’t really speculate on that. I mean, the result is what it is. We're grateful that we met the thresholds required. And now everything shifts to the future.”
He said at the same time, “we have to respect the views of those who did not vote for a plan, and they're very passionate. They voted that way for a reason.
“And really, this next phase, in addition to all of the transformational work we have to do on campus, we have to rebuild relationships, we have to demonstrate to people who weren't prepared to vote in favor today that we have the university's best interests at heart going forward.”
Heidi Ulrichsen is the associate content editor at Sudbury.com. She also covers education and the arts scene.
