The president of the Laurentian University Staff Union said he feels the institution misled his members regarding the school’s insolvency process and secured concessions from the union by not disclosing information.
Laurentian University president Robert Haché was questioned by Tom Fenske this week about when exactly the university began engaging with insolvency lawyers.
The university continues to undergo court-supervised restructuring after declaring insolvency and filing under the Companies’ Creditors Arrangement Act (CCAA) in early 2021.
Just today, Laurentian announced it has received a financial package from the province, and as part of that financial package, 11 members of its board of governors have resigned.
Speaking during the Dec. 14 Laurentian senate meeting, Laurentian University Staff Union (LUSU) president Tom Fenske said he was going “try to stay relaxed” while he asked questions, as he’s extremely upset about information that’s come out in the last week.
That especially relates to the rare Speaker’s Warrant issued by the Ontario legislature last week, which orders Laurentian to hand over privileged documents to the Standing Committee on Public Accounts.
As background, Fenske said that due to Laurentian’s financial troubles, LUSU renegotiated its collective agreement in the late spring and early summer of 2020, and took a salary cut that allowed Laurentian to save $1.8 million.
Fenske also said the union gave LU a $450,000 cheque to prevent members from having to take furlough days.
“I am concerned, because I have now found out there is a chance that the university was engaged with insolvency counsel before those assets were given,” Fenske said. “I would like to know on the record, what is their engagement with insolvency lawyers in the spring of 2020?”
Haché replied by saying he really appreciates the relationship between Laurentian and LUSU.
“With respect to your question, it’s actually a matter of public record,” he said.
“It's in the public record that the university began engaging with external legal counsel regarding the financial challenges that we were facing in the spring of 2020.
“And you'll remember we announced in September 2020, that we had engaged as a result of those initial conversations Ernst & Young (now the firm tasked as the court-appointed monitor of LU’s insolvency restructuring) to come in and do a fulsome review of our financial system situation as we became increasingly concerned about the situation to provide a more fulsome analysis. And that was in the press and we talked about that.”
Fenske said as the president of LUSU, he would have never renegotiated his members’ collective agreement if he’d known there were “conversations happening with legal counsel for insolvency.”
“I would like that to be very clear that we believe we've been deceived,” he said. “And we are now going to have to go to our legal counsel to talk about an unfair labor practice with the university, which is very disheartening after years of working with the institution.”
Laurentian senator Ernst Gerhardt, an English professor at LU, posted a question in the chat of the Zoom meeting, asking Haché where exactly on the public record it says LU had engaged with counsel regarding its financial challenges in spring 2020.
Haché had to leave the meeting early because he had to attend another meeting regarding COVID-19 and the Ontario university sector.
However, he provided an update via direct message to senate speaker Christine Lalonde, and that information was relayed to those attending the meeting. Haché said this information is in his initial affidavit related to Laurentian’s insolvency filing.
Sudbury.com reached out to Laurentian communications, as we were unable to find any reference to the matter in this affidavit. We have yet to receive any information from the university on the matter.
However, we've since been provided with a copy of a Dec. 15 email from Haché to Fenske, in which the Laurentian president reiterated the "university engaged external counsel in the spring of 2020 to assist with the financial challenges it faced." However, he said "while this is on the public record," he was incorrect in stating at the meeting that this information could be found in his initial affidavit. Haché did not indicate in the email where on the public record this information could be found. ****
There is a reference to Laurentian reportedly seeking “external insolvency counsel” in March 2020 in documents related to last week’s Speaker’s Warrant through the Ontario legislature.
The document reads as follows:
“On November 30, 2021, counsel for Laurentian University sent a letter to the Committee offering to produce (i) all documents, including those subject to privilege, created before the University began to consult with external insolvency counsel in March 2020, and (ii) many non-CCAA privileged documents created after that date, but only subject to wholly unacceptable conditions challenging the rights and privileges of Parliament,” the document said.
“The University remains unwilling to provide documents related to the CCAA restructuring.”
Haché’s January 2021 affidavit did refer to Laurentian exploring the possibility of filing under the CCAA as early as the late summer of 2020.
“On Aug. 28, 2020, the Board approved the engagement of EY (Ernst & Young) as financial advisor to LU through a competitive process led by external counsel to LU. EY was engaged by the Board as financial advisor to assist LU in its restructuring efforts and if necessary, act as the Court-appointed Monitor of LU should LU decide to seek protection under the CCAA,” the affidavit said.
“The engagement letter was signed by EY and LU on Sept. 4, 2020.”
****Story was updated Dec. 22 with new information provided to Sudbury.com.
