The beginning of 2025 brings the year in which Laurentian University’s creditors are legally required to be paid out under the terms of its 2022 post-insolvency plan of arrangement.
This fact was highlighted by Laurentian president Lynn Wells during her report in the Jan. 23 meeting of the university’s senate.
She spoke about LU’s obligations following its 2021-2022 journey in creditor protection under the auspices of the Companies’ Creditors Arrangement Act (CCAA), a situation unprecedented in the post-secondary sector and now banned under federal law.
The deadline for Laurentian creditors to be paid is the third anniversary of its exit from insolvency, so on Nov. 28, 2025.
Aside from secured creditors and those owed vacation pay, who were already compensated in 2022, most creditors are still waiting for their money.
Among Laurentian’s creditors are former employees of the university terminated as part of the CCAA proceedings.
“In 2025, Laurentian will also formally exit the CCAA process by completing the Plan of Arrangement,” Wells said in her written report.
She became Laurentian’s president in the spring of 2024.
“To do so, the university has until the end of November to complete the sale of real estate assets to Infrastructure Ontario. These will be leased back for our use where appropriate. The funds from these sales will be used to fund the distribution pool for the repayment of the university’s creditors.
“This is a complex process that involves a number of stakeholders, and several steps will have to take place before we are in a position to make any public announcements. However, the process is well underway and the university is confident that the sales can be completed before the November deadline. We will provide additional updates as we are able.”
During the Jan. 21 meeting, Wells said she wanted to assure senate members that “that this is an extraordinarily high priority, and we work on it every day, and we continue to work towards the timeline that we need to meet this year.”
Laurentian’s 2022 plan of arrangement states that a pool of cash of up to $53.5-million for creditors is to come from the sale of university real estate to the province of Ontario, which will be rented, in some cases, back to LU.
The minimum floor for the pool of cash has been set at $45.5 million. If Laurentian doesn’t fund the creditors’ distribution pool to at least that amount by Nov. 28, 2025, the university will have defaulted (although they have the option to apply for a one-year reprieve).
Creditors will only receive a small percentage of what they were originally owed, or between 14 and 24 per cent.
Sudbury.com attempted to get some answers from the province last fall as to when these real estate deals would be completed so that Laurentian can finally fulfill the terms of its plan of arrangement, to no avail.
Senate member Albrecht Schulte-Hostedde asked president Wells during the senate meeting if she has any idea if the proportion creditors will receive is “going to be on the larger end of that scale or on the smaller end.”
Wells said, “funds that will be disbursed will be done in accordance with the court order plan, and the detail of that plan, so to a maximum of $53.5 million.”
When Schulte-Hostedde again pressed Wells on this point, she said “I wouldn't want to misspeak, senator, in this meeting, because these are sensitive matters. But rest assured that the court-ordered monitor will be ensuring that the plan is followed to the letter.”
Heidi Ulrichsen is Sudbury.com’s assistant editor. She also covers education and the arts scene.