Date set to hear argument against LU's termination of federated university agreement
SUDBURY -- The judge overseeing the insolvency process at Laurentian University has set April 29 as the day to hear motions from Thorneloe University and the University of Sudbury opposing a plan to terminate their relationship with the beleaguered university.
Both Thorneloe and the U of Sudbury asked for a May 31 date to hear their motions, while Laurentian suggested April 29.
In his ruling, Ontario Superior Court Chief Justice Geoffrey B. Morawetz said the sides were unable to agree to a date.
"The court is left with the unenviable task of picking one timetable," Morawetz wrote in his decision. "I have determined that it is necessary to schedule the motions on the timetable proposed by Laurentian."
Laurentian terminated the agreement with the two universities, as well as Huntington University, on April 1, saying it was a necessary move to make the school financially viable.
"Termination of the federation agreements was necessary in order to ensure that millions of dollars paid by Laurentian to the federated universities each year relating to the delivery of programs and courses will remain within Laurentian, as part of its path to future financial sustainability," LU said April 1.
"Laurentian has the capacity and the faculty required to teach all students in a more efficient delivery model. These steps allow Laurentian to focus its resources on programs and courses that students have demonstrated they are interested in taking."
A separation agreement was reached with Huntington on April 7, but the other two federated schools went to court to try and reverse the decision.
In his ruling, Morawetz listed several reasons for siding with Laurentian, including the fact the university's insolvency process has a deadline of April 30. That's when loans provided under the Companies' Creditors Arrangement Act (CCAA) mature.
A restructuring plan is key to having those loans – known as DIP financing – extended beyond April 30 so the next step in restructuring can proceed.
"The determination of the Thorneloe and U Sudbury motions may impact on the positions being taken by parties on any motion to extend the stay of proceedings and any motion to extend the DIP Facility and to provide additional DIP financing," Morawetz wrote.
"The timetable proposed by Thorneloe and U Sudbury extends well beyond the existing stay of proceedings and maturity of the DIP Loan and brings increased risk and uncertainty to the CCAA proceedings, both of which are not desirable."
The date proposed by Laurentian also provides time for cross-examination of all are called to testify, the judge said.
"In my view, the timetable proposed by Laurentian, although not ideal, is preferable to that proposed by Thorneloe and U Sudbury, as it reduces the risks and uncertainty referred to above," Morawetz said.
The Thorneloe motion will now be heard April 29, while the U of Sudbury is waiting to hear the earliest date when a bilingual hearing can be scheduled.
The full transcript of the ruling can be found here.