The long-awaited cheque has been sent out by Laurentian University to settle its outstanding debts from its insolvency declaration over four years ago. The final group of creditors, including individuals and organizations, will now receive a portion of what they were owed. A real estate transaction between Infrastructure Ontario and Laurentian University has paved the way for the repayment plan to the university’s remaining creditors.
In September 2022, unsecured creditors were presented with a proposal that offered them a repayment range of 14 to 24 cents on each dollar owed. Voting against this plan meant risking no compensation at all. Fortunately, the proposal was approved, ensuring that creditors would receive the maximum repayment of 24% of their total debt.
To fund the repayment to creditors, Laurentian University sold six properties, including NOSM University, to the Ontario government for $53.5 million. This deal enabled the university to fulfill its financial obligations and secure the maximum repayment percentage for its creditors. The agreement between the province and Laurentian was finalized recently.
While the university will lease back three of the properties, specific lease terms for the East Residence, Living with Lakes Centre, and a maintenance building are still being negotiated. Despite these arrangements, Laurentian’s president, Lynn Wells, assured that students should not experience any disruptions, and the university is optimistic about its future prospects.
The repayment to creditors must be completed by November 29, benefiting 117 faculty members, 42 staff, and 37 non-union employees who were laid off during the insolvency period. Fabrice Colin, the president of the Laurentian University Faculty Association, acknowledged the positive outcome of reaching the maximum repayment but highlighted the hardships faced by the community and terminated employees due to the insolvency process.
Former economics professor David Leadbeater expressed dissatisfaction with the repayment deal, claiming that many faculty members felt pressured to accept the arrangement to prevent the university’s closure threat. Leadbeater and a group of former faculty members continue to advocate for an investigation into Laurentian’s insolvency and the real estate transaction with the province.
Michel Piché, a retired chartered public accountant and former chief financial officer at Carleton University, who assisted in Laurentian’s restructuring, emphasized the importance of the real estate deal in resolving the university’s financial crisis. While the lease terms are yet to be disclosed, Piché believes the transaction was a strategic approach to address the financial liabilities. He also mentioned that the province’s relationship with Laurentian regarding the leased buildings is akin to a landlord-tenant agreement, providing some level of security for the university.
Piché commended the efforts of the Laurentian team in stabilizing the institution post-insolvency, although he refrained from endorsing the unprecedented use of the Companies’ Creditors Arrangement Act. He cautioned that restricting colleges and universities from seeking creditor protection could limit their options in overcoming financial challenges. Piché emphasized the resilience of Laurentian University, noting its return to pre-insolvency spending levels and the employment of additional faculty members to enhance its academic programs.
In conclusion, Piché expressed confidence in Laurentian’s future success, attributing it to the community’s dedication and the university’s capacity to thrive despite past adversities.
