Laurentian University’s president said it remains the university’s intention to serve motion materials by the end of this month, “or within a few days thereof,” seeking a “meeting order” to present a plan of arrangement to its creditors.
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.
Laurentian continues to undergo court-supervised restructuring after declaring insolvency in February 2021, and filing for creditor protection under the Companies’ Creditors Arrangement Act (or CCAA).
During a May 30 court hearing, the stay of proceedings protecting Laurentian from its creditors was extended once again to Sept. 30.
At that hearing, Laurentian’s counsel, DJ Miller, said the university expected to be able to serve motion materials within the next 30 days, or by the end of June, “seeking a meeting order for the purpose of being able to present a CCAA plan to its creditors.”
Miller said that assuming this timeline, creditors could then meet to vote on the plan of arrangement in mid-to-late August.
Robert Haché was asked for a progress report on the plan of arrangement by Laurentian senate member Josée Turcotte during the June 21 senate meeting. She noted that Haché had not given a specific update on the timing in his president’s report.
“So my question is, it’s June 21, and I’m just wondering if you are about to seek that meeting order, because it was not in the president’s report,” Turcotte said.
“There is a lot of work that's being done presently, on completing the plan of arrangement, getting agreement on the draft plan of arrangement with major creditors,” Haché replied.
“I know there were meetings today, I know there are meetings tomorrow. It is getting very close. And it is absolutely the intention of the university to seek that meeting order just as as rapidly as we can. Hopefully by the end of the month, or within a few days thereof, it is what I'm hearing now from the people that are leading the negotiations.”
Haché said in his written report to the senate that there will be further activity over the summer as the university finalizes its plan of arrangement and obtains an order from the court authorizing a meeting of creditors to be scheduled.
Ernst & Young, the court-appointed monitor of Laurentian’s CCAA process, will also send out detailed packages to all creditors, he said.
“Over the next four months, Laurentian will present its plan of arrangement and schedule a meeting to give all creditors an opportunity to vote on the plan,” Haché said in his report.
“These steps are critical milestones as we continue to advance towards emerging from CCAA restructuring. Detailed packages explaining the terms of the plan will be mailed to all creditors well in advance of the meeting.”
Haché said that in parallel with the presentation of the plan of arrangement to its creditors, Laurentian and its advisers will be working hard over the summer to put in place documentation “that will be required to ensure a successful exit from the CCAA proceedings.
“This includes arranging long-term financing that will replace the $35 million in existing debtor-in-possession (or DIP) financing that is currently being held by the province, and which needs to be replaced prior to the emergence.”
The province has indicated that it will refinance Laurentian’s $35 million DIP loan with a longer-term loan upon implementation of a CCAA plan.
It has also offered to purchase certain Laurentian assets for $53.5 million. Those funds would be made available to creditors as part of the CCAA plan of arrangement.
Exactly what properties will be part of this deal had not yet been determined as of the end of last month, although court documents filed by Laurentian indicate that the university has requested that the two buildings occupied by NOSM University be considered on a priority basis.
Heidi Ulrichsen is the associate content editor at Sudbury.com. She also covers education and the arts scene.
