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Time to pay the accountants for Laurentian University insolvency process

Ernst and Young in court Oct. 12 seeking to have $5.3 million approved for payment
Laurentian University in Sudbury (Supplied photo/Laurentian University)

Ernst and Young, the court-appointed monitor of Laurentian University, will motion Oct. 12, for approval of their fees associated with the CCAA proceedings.

With taxes, that amount totals $5,345,655.51.

The hearing will begin at 11 a.m. by video conference presided over by Chief Justice Geoffrey Morawetz.

Laurentian University has been undergoing court-supervised restructuring under the Companies’ Creditors Arrangement Act (or CCAA) since Feb. 1, 2021. 

In September, the university’s creditors narrowly approved the plan of arrangement, a blueprint for Laurentian's payback plan.

Most creditors are expected to receive only a small portion of what they’re owed over the next three years.  On Oct. 5, the plan of arrangement was approved through “sanction order” by Morawetz.

This motion, filed Oct. 5, asks for approval of the 10th, 11th, 13th and 17th reports of the monitor (the 17th is included with the motion) and the fees and disbursements of Ernst and Young, and the Ernst and Young LLP professionals (referred to as EY FAAS in the motion) for their accounting assistance preparing year end financial statements. 

The motion also asks for approval of the fees and disbursements of the monitor’s counsel, Stikeman Elliot LLP. 

The work in question was performed from Jan. 1 to July 1 and include the monitor’s invoices in the amount of $2,294,720.00 (plus applicable taxes of $298,313.60); the EY FAAS invoices related to the accounting assistance, totalling $438,448.50 (plus applicable taxes of $56,998.31); and Stikeman and Elliot’s accounts of $1,991,905.95 and disbursements of $5,630.92 (plus applicable taxes of $259,638.23). 

The amount totals $5,345,655.51. 

Ernst and Young were appointed as monitor as part of the Initial Order, filed Feb. 1, 2021. They monitored the operations of the university to ensure they were operating in compliance with the court orders and to report to the court when required.

The monitor has filed 17 reports with the court to date, including one in the current motion, as well as four reports that detail the activities of Laurentian, the Monitor and EY FAAS. 

The motion states that the proceeding was “unprecedented” and therefore more complex, as it is the first public university to undergo the CCAA. Ernst and Young also noted the lack of supporting resources at Laurentian as a hurdle. 

“As a result of the complexity, lack of internal resources at LU and high-profile nature of the CCAA proceeding, the monitor's more intensive involvement with numerous aspects of the CCAA proceeding has been required,” the documents read. This is the reasoning behind the request for assistance from the Ernst and Young LLP professionals (EY FAAS in the motion filed) to perform duties in support of the monitor.  

These more significant matters include continuing to resolve claims through the claims process and compensation claims process; assisting in the preparation of cash-flow forecasts and disbursement review, reporting to the court on the status of proceeding, assisting Laurentian in the connection with responding to information requests and liaising with significant stakeholders, including creditors.