Creditors should reject Laurentian University’s plan of arrangement, and the insolvent university should be “taken over by another public university for a defined period,” says a local coalition opposing what has happened under LU’s restructuring.
Laurentian University has been undergoing court-supervised restructuring under the Companies’ Creditors Arrangement Act (CCAA) since declaring it was insolvent in February 2021.
If approved by creditors next month, the university’s plan of arrangement to pay off its creditors would finally allow Laurentian University to exit insolvency this fall.
The plan of arrangement has gained the support of two Laurentian unions, the Laurentian University Faculty Association (LUFA) and the Laurentian University Staff Union (LUSU).
The Tricultural Committee is a group formed by representatives of Save our Sudbury, the Coalition nord-ontarienne pour une université de langue française à Sudbury and key leaders from local Aboriginal communities “in response to the devastating local impact of Laurentian University’s use of the CCAA.”
This committee joins a group of fired Laurentian faculty who also say the university’s debt plan should be voted down.
Besides recommending the rejection of Laurentian’s plan of arrangement, the Tricultural group is also advocating for the following actions:
• Support the establishment of an independent Indigenous university, binding commitments to consultation, and restitution for its destruction of the Indigenous Studies program.
• Support establishing an independent Franco-Ontarian university and transfer remaining Francophone programs to the Université de Sudbury.
• Support Laurentian as a community-oriented and collegial Anglophone university with a full range of Arts and basic Sciences programs, as well as cultural and sports activities.
• Demand a public enquiry and actions to hold accountable all those responsible for the financial mismanagement and lack of transparency at Laurentian.
“To help achieve these objectives and to rebuild public confidence in the university and respect for its degrees, educational commitments, research, and community responsibilities, Laurentian should be taken over by another public university for a defined period,” said the Tricultural group’s statement.
“The new board and administration should consult widely with Indigenous, Franco Ontarian, and Anglophone communities in Sudbury and Northern Ontario and be committed to protecting public university education and university autonomy. Laurentian’s proposed plan can and must be rejected.”
The Tricultural Committee said Laurentian’s administration and board of governors deliberately chose the destructive CCAA insolvency process, and they are now doing damage control for their actions.
“Taking advantage of the pandemic, they have practiced a ‘shock doctrine’ strategy, and peddled half-truths and deceit, such as that there was ‘no alternative to claiming insolvency,’ a claim that Ontario’s Auditor-General debunked,” the statement said.
“Another lie is that the government wouldn’t intervene – but they did intervene, in at least two bailouts so far. Now these misleaders are pushing their misbegotten restructuring plan — again, through fear-mongering of a catastrophic end for Laurentian. They are simply not credible.”
However, an information circular for Laurentian’s creditors published on a website dedicated to documents related to the university’s insolvency refutes the idea LU will have to come back with a better offer if the plan of arrangement is voted down.
The circular said there is “no requirement or expectation that Laurentian will have to come back with a better offer.”
It said the recovery offered to creditors in the plan of arrangement “is only possible due to the financial assistance offered by the province.
“That support is conditional upon a successful vote on the plan. Laurentian does not have the resources to offer more to affected creditors than the plan provides. Therefore, in the event that the creditors vote against the plan, Laurentian expects that it will report to the court that it cannot implement a successful plan.
“In such circumstances, the most likely outcome is that Laurentian would need to focus its efforts on implementing an orderly liquidation with the least impact upon the students.”
The circular also addresses what is likely to happen if the plan of arrangement were to be rejected by creditors.
Similar to the Tricultural Committee’s recommendation that Laurentian be taken over by another university upon the rejection of the plan of arrangement, the information circular says this is an option.
The circular document says if the plan is rejected, the mostly likely outcome for Laurentian University is liquidation.
“Options could include a ‘going-concern liquidation’ (the transfer of the assets and operations to another university) or a ‘piecemeal liquidation’ (a complete cessation of operations and sale of assets to one or more parties),” the circular said.
If the plan of arrangement is rejected and a going concern transfer of operations is not possible (the ongoing operations of Laurentian can no longer continue), the university will work closely with the province to ensure that a transition plan is in place to help students complete the current academic term and transition to another university, said the circular.
