Laurentian asks to extend creditor protection period
Laurentian, which is the largest university in northern Ontario, declared insolvency on Feb. 1
Laurentian University says it needs more time to develop a plan to exit restructuring and is asking a judge to approve an extension of its loan agreement, and a stay of proceedings against creditors, until January 31, 2022.
Robert Haché says in an affidavit filed with the motion on the court monitor's website that Laurentian has negotiated a fee of $350,000 with its lenders to extend the existing loan agreement.
As part of its ongoing restructuring, Laurentian cut dozens of programs in April, and around 100 faculty members lost their jobs.
When it was declared insolvent, Laurentian became Canada's first post-secondary institution to enter restructuring under the Companies' Creditors Arrangement Act (CCAA), normally reserved for the private sector. Under the act, organizations are allowed to operate while sorting out their financial problems.
Laurentian has said the cuts it made under the CCAA proceedings has resulted in cost savings of around $40 million per year, representing a reduction of 25 per cent to its annual expenses. In addition to the academic restructuring, Haché testified in his affidavit that changing the university's faculties and departments to make them more efficient, signing labour contracts and severing ties with its federated partners have created additional savings.
In order to exit the CCAA proceedings Laurentian says it will need to refinance its debtor-in-possession (DIP) loans. Extending the CCAA proceedings into early 2022 would give the university time to negotiate those terms, it says.
Enrolments trending down
Also in his affidavit to Ontario's Superior Court of Justice, Haché says the institution is projecting a 30 per cent decline in new students for the upcoming academic year.
"It appears that registration levels for returning students are trending as forecast by Laurentian," he says in the affidavit. But he added the university will not have final enrolment numbers until fall registration numbers are counted.
Last year, Haché says 6,250 full-time equivalent undergrads were registered .
Progress on reviews of real estate and governance structures
Haché also says Laurentian is undergoing a real estate review to determine how it might monetize its property to pay off debt. That could include selling property or leasing buildings.
Haché says Laurentian's real estate advisor should be in a position to provide early input by the end of September 2021.
The restructuring process will also include an operational and governance review that will re-examine the size and composition of its board of governors and senate.
Haché also mentions the provincial Auditor General's value-for- money investigation. Although the investigation was launched last April, staff of the Auditor General's office made their first on-site visit to Laurentian on August 10.
Auditor General's staff visit Laurentian
"As we have learned through the process, this type of audit is a very extensive exercise that touches on virtually every aspect of the university's operations and involves many of the same LU personnel who are key members of the management team responsible for leading the university through its CCAA restructuring," he testified.
"LU has fully cooperated with the AGO's investigation and is facilitating the voluminous production of documents and information in response to the AGO's requests."
Auditor General Bonnie Lysyk told CBC news there is no timeline for the completion of the investigation and subsequent report.
A judge will have to approve the motion for an extension to the stay of proceedings. That motion goes before the court on Friday, August 27.