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Med school may get $14.6M in endowments back from Laurentian

Proposal in CCAA plan of arrangement is to pay back money originally donated to medical school for scholarships and bursaries
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NOSM University's Sudbury campus.

It is possible that NOSM University (Northern Ontario School of Medicine) will recover more than $14 million locked into the Companies’ Creditors Arrangement Act (CCAA) when Laurentian University became involved in financial insolvency in February 2021. 

The proposal put before the Ontario Superior Court of Justice in the past week outlines that Laurentian University (the applicant) will transfer funds back to NOSM University in the amount of approximately $14.6 million.

It was back in November 2021 that NOSM president and CEO Dr. Sarita Verma expressed her concern at a public meeting about the loss of funds that had first been endowed to the medical school when it was part of Laurentian. 

It was revealed at that time that $14 to $15 million worth of endowments were directed to LU before the financial insolvency occurred. The endowments were meant for the most part to be applied toward scholarships and bursaries at the medical school. 

Laurentian’s recent proposed plan of arrangement states "that the Applicant will transfer to NOSM University, or as NOSM University may direct, that portion of Laurentian’s investment account equal to the aggregate amount of the NOSM Endowment Funds. The Monitor notes that as at April 30, 2022 this amount was estimated to be approximately $14.6 million.” 

The court document also states there will be interest income added to the payout.

"The actual amount to be transferred will be adjusted to reflect additional interest income and investment gains and/or losses, based upon the most recent monthly information available as at the Plan Implementation Date."  

The payout proposal is just that, at this time, a proposal. The court document states that the creditors on record with CCAA will be asked to approve the plan of arrangement by a vote. The vote is expected to be held on Sept. 14, 2022.  

NOSM declined any comment on this latest development because the matter is still before the court.

"Due to the Laurentian CCAA proceedings, NOSM University is unable to comment," said an email statement from the medical school.


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Len Gillis

About the Author: Len Gillis

Graduating from the Journalism program at Canadore College in the 1970s, Gillis has spent most of his career reporting on news events across Northern Ontario with several radio, television and newspaper companies. He also spent time as a hardrock miner.
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