Laurentian returns to court under the Companies Creditors’ Arrangement Act (CCAA) April 29 to ask for an extension to a stay of proceedings that would protect it from its creditors until Aug. 31 of this year.
It’s also asking for a further $10 million in debtor-in-possession (DIP) interim financing on top of the $25-million DIP loan it already received earlier this year after declaring insolvency.
In an affidavit filed April 21, Laurentian University president Robert Haché said that one of the next steps that the university will take as part of its restructuring will be “a detailed assessment of all real estate owned by LU, and buildings leased to other parties.
“The purpose of the review will be to determine what assets may exist that could be monetized for the benefit of stakeholders, or that could create future financial efficiencies for the benefit of LU and its stakeholders,” said Haché in the affidavit.
“This process will also be undertaken with the assistance of external parties, including those with sector expertise.”
Haché said Laurentian will also come up with a plan to deal with its creditors.
Laurentian had $321.8 million in liabilities as of April 30 of last year, and owes $71.1 million to Royal Bank of Canada, $18.5 million to the Toronto Dominion Bank and $1.3 million to Bank of Montreal.
“Provided the Order sought by LU is granted, LU expects to bring a motion seeking a Claims Process Order in May, in order to identify the universe of claims that may exist and seek to have all claims determined,” Haché said.
“During this time LU will also develop the framework for a Plan of Arrangement, so that when all possible sources of recovery for creditors have been identified, a Plan can be put to creditors.”
Haché also said the next phase of the CCAA proceedings will also involve “the re-building of confidence and relationships with students, faculty, staff, donors and research-granting agencies, lenders, the communities we serve, and all stakeholders.
“We appreciate that this re-building process will take some time, but we are committed to doing whatever it takes to regain any ground that may have been lost through past events or this proceeding,” he said.
He also said Laurentian also plans to review its governance process to implement best practices for the future.
“One of the commitments that will be undertaken by LU, which is embodied in the Term Sheets signed with each of LUFA and LUSU, is a thorough review of all operational and governance matters within the entire University in order to identify and implement best practices for the future,” he said.
“To this end, LU will be engaging, through my office as President, an external advisor with sector expertise to undertake an extensive review of all areas. This process will include consultation with LU’s stakeholders and will be open and transparent.”