Eleven members of a group calling themselves the Terminated Faculty Committee have signed a letter urging their colleagues to reject the proposed Laurentian University plan of arrangement.
A plan of arrangement is a plan put forward by an insolvent organization to pay out its creditors, and it must be approved by those creditors. Learn more about them here.
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).
Provided the plan of arrangement is approved by Laurentian’s creditors, the university hopes to seek a “sanction order motion” to exit insolvency on Oct. 5.
The signatories to the letter laid out five reasons they are urging some 90 of their terminated colleagues to reject the university’s rhetoric about the implications of rejecting the plan of arrangement and vote no anyway. The letter was signed by Crestina Beites, Thierry Bissonnette, François Boudreau, Eduardo Galiano-Riveros, Youssou Gingue, Rachel Haliburton, Vassilios Kazakidis, David Leadbeater, Stephanie Martens, John Peters and Reuben Roth.
“We, the members of the Terminated Faculty Committee, encourage you to vote ‘against’ Laurentian’s proposed Plan of Compromise or Arrangement,” the letter reads. “The proposed Plan is inadequate and unjust. It is a mix of rotten carrots and divisive threats designed to drive a majority into voting yes. We want a fair settlement. This one is not it.”
The five reasons with a brief explanation follow:
1.) “Terminated faculty and staff are expected to approve the elimination of our jobs, the destruction of careers, the loss of future earnings, the cancelling of benefits, and the slashing of severance packages – all for a possible payment of only 14-24 cents on the dollar.”
They argue that Laurentian can also delay those payments by as much as four years, inflation-free. The faculty also argue that even the rate of 14 to 24 cents isn’t guaranteed.
2.) “The threat being held over us is that if the plan is voted down Laurentian necessarily will be liquidated (i.e., operations closed and all assets sold off). This claim is false.”
The terminated faculty say they have reviewed past CCAA cases where a plan of arrangement has been rejected and what tends to follow a rejection, they said, is it “sends all the parties back to renegotiate and come up with a better plan. In some cases, CCAA insolvency plans have gone through as many as four votes.”
The group said the rejection would simply force all parties back to the table to continue negotiations.
“We understand that another round of negotiations could mean a delay in payment and additional emotional strain,” the terminated faculty write. “But we believe that voting against the proposed plan in favour of a fairer settlement will be worth the effort and wait.”
3.) “A vote against the plan would also send a message to the provincial government to step up to their responsibility.”
The faculty say, in their view, the province bears “a significant share of responsibility” for Laurentian’s near-collapse by failing to provide adequate oversight of the institution’s operations, only stepping in to provide “bail-out” funding as the situation deteriorated.
Had the province provided better stewardship over the years, the bail-outs might not have been necessary, they argue.
The group also criticizes LU’s administration for refusing a $100-million offer from the province in December 2020 because it didn’t want to “open its books” to the province. Instead, the school has spent more than $20 million so far on the CCAA process.
4.) “There are also other, non-financial reasons why our members will be voting against Laurentian’s plan.”
The terminated faculty argue Laurentian’s bilingual, tricultural model was “destroyed by the actions of the Laurentian administration” yet the LU still wants to prevent any potential transfer of Francophone programs to institutions “outside of Laurentian’s control”. The clause in the plan of arrangement covering this should be removed, they argue.
Not only has the Franco-Ontarian community “turned its back on Laurentian and is aiming to create an independent Franco-Ontarian university” as a result, the plan ignores the federated universities, they say, and the plan calls for the continuation of the Indigenous Studies program but “does not require consultation with Indigenous peoples as a foundational condition post-CCAA.”
“The plan does not even provide for a vote for our federated colleagues who are still owed money by Laurentian for retiree health benefits,” the group says. “It is unacceptable that the University of Sudbury, Thorneloe University and Huntington University receive only one vote each on the Plan and that our federated colleagues receive no individual votes.”
The plan also excludes the recovery of private donations and research grants received before December 2020.
5.) “We believe Laurentian’s CCAA process has set a terrible precedent for public universities and institutions in Ontario and Canada.”
If this can happen to Laurentian University — with a public institution appearing to seek insolvency deliberately to make operational changes it couldn’t otherwise have made — it can happen to any other similar institution in the country, the terminated faculty argue.
“All communities should be aware that program and research commitments, donations, and obligations can be severed with little regard from the perpetrators,” they write. “Further, people working in universities across Canada should be aware that the CCAA process makes their Collective Agreements not worth the paper they are written on.”
With proxy ballots and claim statements soon to be sent out, the terminated faculty are encouraging their colleagues to vote no.
“We encourage you to mail in your proxy before 10 a.m. on September 9, 2022, with the box checked ‘Vote AGAINST approval of the Plan’.”
