Despite a statement from Laurentian University’s president last month that it was the university’s intention to file plan of arrangement motion materials by the end of June, “or within a few days thereof,” no such documents have yet been filed by the university.
A plan of arrangement is a plan put forward by an insolvent organization to pay out its creditors, and it must be approved by these creditors.
Sudbury.com reached out to Laurentian for an explanation of the delay this week, and received only the following brief written statement.
"We are continuing to work on the details of the plan and will provide an update to our community once the timing of the next steps has been confirmed,” said the statement.
We also reached out this week to a representative of Ernst & Young, the court-appointed monitor of LU’s insolvency restructuring, but had not received a reply by the time this story was published.
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).
Laurentian University Staff Union (LUSU) president Tom Fenske, who represents non-faculty LU employees, told Sudbury.com in a phone conversation July 13 he doesn’t know when plan of arrangement motion materials will be filed.
“That’s what we’re waiting on right now,” he said. “I don’t know if anybody would have that date.”
However, he’s hopeful that even though plan materials haven’t yet been filed, Laurentian will still be able to emerge from insolvency restructuring by Sept. 30, the date when the stay of proceedings protecting LU from its creditors currently expires.
“I'm both hopeful and have the expectation that deadline will be met, because, you know, I don't really see the reason why it can’t be met,” Fenske said.
He added that for legal reasons, he can’t comment on how plan of arrangement negotiations are proceeding.
“I just know that the monitor has an obligation to make sure that it's fair, and that's an obligation of the court and the law, right?” Fenske said. “So I think that's something to keep in mind as we go through this.”
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.
Laurentian president 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 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 June written report to the senate that there will be further activity during 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 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.”
