Members of Laurentian University’s senate voiced their displeasure May 17 after university president Robert Haché revealed plans to seek yet another extension of the stay of proceedings protecting the school from its creditors, this time until September 30.
Laurentian declared insolvency and filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) well over a year ago, on Feb. 1, 2021, and has been undergoing court-supervised restructuring since that time, which has included layoffs and program cuts.
The current stay of proceedings, issued by the court this past winter, expires May 31.
The university plans to return to court May 30 to seek a further four-month creditor protection extension. Laurentian is also currently in negotiations to come up with a plan of arrangement to pay out its creditors, which they must then approve.
Haché said motion materials that provide details on the status of Laurentian’s restructuring will be presented to the court and made available on or about May 23.
“I do want to make sure that people understand that there was never an expectation that the process would end on May 31, but simply that it would be a report back to the court,” said Haché, speaking at the May 17 meeting of the university senate.
“In fact, we will be providing a request to have an additional stay until Sept. 30 to allow completion of the final stages of the plan of arrangement to allow for a motion for a vote to be held amongst the creditors, so the plan of arrangement can be approved.”
During the April senate meeting, Haché said the university’s goal was to file a plan of arrangement before the courts before May 31, but now says there is a delay of a few weeks.
He said the reasons for this delay will be made clear in court filings later this month.
“There was a recent development in the discussions around a plan of arrangement that is responsible for the extension of the timeline,” Haché said. “I wish I could share it with senators today, but I will refer senators to the motion materials that will be filed on around May 23, which will provide the fulsome update of what has transpired over the past three months and why this is taking a little bit longer than was expected as late as mid April.”
He said the current expectation is that the vote by creditors on the plan of arrangement will take place this summer, prior Sept. 30, when the stay of proceedings would once again expire.
Responding to questions by senate member Jim Ketchen, Haché said the goal is for the “terminus” of the CCAA process itself to be toward the end of the summer, or the beginning of fall.
“So the goal is to complete the process as quickly as possible, and certainly to complete it before the end of the year,” said the Laurentian president. “It is still just a little bit premature for me to pronounce on an expected date, you know, given the experience we've had so far during the process.
“But we are looking at the path we have taken, and we are most of the way down that path, ... and getting closer and closer to the end. And that should be somewhere around Sept. 30, and I can't pronounce at this time whether it will be just before or slightly after.”
Senate member Albrecht Schulte-Hostedde said, “obviously I’m concerned about the plan that the president has put forward” with “the delay of four months to Sept. 30.”
“Let me emphasize that this is not a delay,” Haché said. “There was never an expectation that the exit would occur on May 31.”
But senate member Dan Scott said given some of Haché’s earlier statements about the CCAA process, it shouldn’t be a surprise to him that senate would have “developed the, it turns out, mistaken expectation that we would be close to exiting the CCAA, and that a plan of arrangement would be presented at the end of May. The documentation clearly shows that he believed this as well, unless he was deliberately misleading us, which I do not believe would be the case.
“So I'd like to ask Senator Haché to apologize for trying to tell us that we were silly for having developed that expectation, given his own words.”
Haché replied that each time he’s reported to the senate on expectations around the CCAA process, “they were based on the best information that the university had at the time that those statements were made.”
Senate members expressed concern about some of the consequences of Laurentian continuing to operate under creditor protection for much of 2022. That includes putting the development of Laurentian’s new strategic plan on hold until the university exits creditor protection.
Haché explained that the advice the university received is that in developing a strategic plan, the university needs to know what resources will be available, and that will only be known once the CCAA plan of arrangement is in place.
Schulte-Hostedde said he wondered “how we’re expected to recruit students in the fall without a strategic plan in place, and if there's any thought to the consequences of having delayed this CCAA, up to Sept. 30.
”Once again emphasizing that the Sept. 30 date with regards to the CCAA is not a delay, Haché said there’s an expectation that Laurentian will not begin to rebuild its enrolment until the fall of 2023. Year-over-year, domestic high school applications remain 44 per cent behind last year's applications.
But Haché said there are some positive signs in areas such as online programming.
“There will absolutely be some impacts on enrolment this fall,” Haché said. “But there will be enrolment this fall, and it will be enrolment that will be, we believe, robust enough to provide the springboard to rebuilding as we exit from CCAA.”