Court extends creditor protection for Laurentian University until Aug. 31
The Canadian Press
Published Monday, May 3, 2021 3:05PM EDT
An Ontario court has extended an order allowing a struggling northern Ontario university to continue to operate while protected from its creditors.
A stay of legal proceedings against Laurentian University set to expire Sunday evening has been prolonged to Aug. 31 as the school undergoes restructuring.
In a handful of rulings issued over the weekend, the Ontario Superior Court also agreed to let Laurentian cut ties with three federated universities as part of the school's efforts to gain financial stability.
Those universities -- the University of Sudbury, Thorneloe University and Huntington University -- can't access provincial funding directly, and instead receive money from Laurentian according to a funding formula in exchange for delivering programs and services.
While Huntington reached an agreement with Laurentian before the stay's initial expiry date, the other two schools had opposed the proposal to sever ties, citing financial hardship and other grounds.
Separating from the three schools was one of the criteria the Sudbury, Ont., university needed to meet in order to access a $10-million loan.
In a report filed April 26, the monitor for the proceedings said the additional financing should give Laurentian “sufficient liquidity” to fund its operations until Aug. 31.
As well, extending the stay should “provide comfort” to Laurentian's students that the university will continue to function normally throughout the spring and summer semester, Ernst & Young wrote in the report.
The monitor said that given the recent uncertainty, Laurentian had allowed students to enrol without paying deposits, but will now be billing them, with payments due on Friday.
More than 2,900 undergraduate students were registered as of last Monday, and roughly 470 graduate students had signed up for at least one course, it said.
Laurentian has been under creditor protection since Feb. 1. The school's president, Robert Hache, has said the institution became insolvent after a decade of financial strain from a variety of issues such as the region's declining population.
At the time, Hache said court proceedings under the federal Companies' Creditors Arrangement Act would not affect day-to-day operations at the university.
Last month, Laurentian cut more than 60 academic programs, most of them at the undergraduate level, it said had “historically low enrolment.”
Meanwhile, the Ontario Confederation of University Faculty Associations said more than 80 faculty members had lost their jobs as a result of the move.
This report by The Canadian Press was first published May 3, 2021.