Laurentian University is preparing to deal with its creditors as its insolvency proceedings work their way through the courts.
The university, which is restructuring under the auspices of the Companies’ Creditors Protection Act (CCAA), was in court today, making several requests.
The reasoning behind these requests is laid out in the fourth report into Laurentian’s CCAA filings by Ernst & Young, the court-appointed monitor of the process. You can read that here.
It was asking for a court order approving a process for calling for claims from creditors and establishing certain dates before which such claims must be filed.
As of April 30, 2020, Laurentian had $321.8 million in liabilities. It owes $91 million to three different Canadian banks — Royal Bank of Canada, TD Canada Trust and the Bank of Montreal.
The university is also asking for a director to establish a methodology for calculating compensation claims in consultation with two of Laurentian’s unions, the Laurentian University Faculty Association (LUFA) and the Laurentian University Staff Union (LUSU).
The Laurentian faculty and staff terminated as part of the restructuring efforts have to get in line with other creditors in an attempt to access severance pay.
Claims against Laurentian must be submitted by July 30.
TD Canada Trust is asking that claims in excess of $5 million go through a separate process, but Ernst & Young said this would lead to confusion.
Laurentian is also asking that the court appoint Sudburian Louis Pagnutti as the chief redevelopment officer to assist it in its restructuring efforts.
The university’s application to the court said Pagnutti “has extensive experience in overseeing business functions in large and complex organizations and is also well-suited to assist the applicant given his local ties to Sudbury and the university.”
Pagnutti would be compensated at an hourly rate of “$650/hour (up to a maximum of 80 hours each month) and the repayment of reasonable out-of-pocket expenses, plus applicable taxes,” said documents filed to the courts.
At the same time, Laurentian is also asking for an order increasing the existing cap on the maximum amount of fees that may be incurred by and paid to independent counsel for the board during the CCAA proceeding from $250,000 to $500,000.