Laurentian says it can pay creditors a year earlier than expected

Laurentian University in Sudbury. (CTV Northern Ontario File)

Thanks to a plan to sell its real estate to the province, Laurentian University announced Friday afternoon it will be able to pay creditors a year earlier than expected.

Creditors will vote on a plan to allow LU to emerge from insolvency Sept. 14. Under the original terms, creditors would receive payments under the plan of arrangement within four years.

But lawyers for the university filed an amended plan Friday following an update from the province.

"As a result of the province’s continuing assessment of Laurentian’s properties, the province is confident that it can purchase the designated real estate assets from Laurentian University within three years of plan implementation," LU said in a news release.

Under the plan of arrangement, unsecured creditors will get between 14 and 25 cents for every dollar they are owed.

Some groups have called for the plan to be rejected, although under the Companies' Creditors Arrangement Act, LU would cease to operate should that happen.

A simple majority is required for the plan to be approved.

“We are grateful for the effort the province has made, as it will have the effect of providing all affected creditors with an accelerated payout period under the amended plan,” Jeff Bangs, chair of Laurentian's board of governors, is quoted as saying in the news release.