Laurentian seeks to extend restructuring deadline to May 31

Laurentian University sign in Sudbury, Ont. (File)

Laurentian University is heading to court this week looking for more time to complete its restructuring process under the Companies' Creditors Arrangement Act.

The current deadline is Jan. 31.

Lawyers for the insolvent university will appear in front of Ontario Superior Court Justice Geoffrey B. Morawetz on Thursday morning seeking an extension to May 31.

The motion would also allow LU to hire a third-party consultant "to assist LU with the development of a strategic plan," said the court filing by Ernst & Young, the accounting firm acting as the monitor in the proceedings.

"To date, LU, with the assistance and oversight of the monitor, has commenced and implemented two claims processes, undertook a full real estate review, undertook and completed a comprehensive governance review with respect of each of the board and senate, and undertook a full operational review of the university," the court filing said.

"The stay extension is required to enable the applicant to continue operating in the ordinary course while continuing to implement a restructuring."

Laurentian is also seeking $35 million what's known as a new DIP loan – money an insolvent corporation borrows at a higher rate so it can continue operating as it restructures. The $35 million would be used to repay a previous DIP loan, and give the school enough money to continue operating.

While earlier DIP loans come at a high interest rate – 8.5 per cent – loan guarantees from the province means LU has been able to negotiate a much lower interest rate of 1.052 per cent for the new loan.

The university also confirmed the impact of the CCAA filing on enrolment. It expected a 30 per cent dip, and the final numbers reflect a 33 per cent drop. That works out to 1,024 new students in fall 2021, compared to 1,531 in fall 2020.

"Despite the reduction in first-year student enrolment, overall enrolment at LU exceeded the projections by approximately 400 students," the court filing said.

"Approximately 8,000 individual students enrolled at LU for the fall 2021 semester. Of the approximately 8,000 individual students enrolled in fall 2021, approximately 2,100 were enrolled in online programs while approximately 5,900 were enrolled in programs primarily delivered in-person at the Sudbury campus."

And the amount of tuition LU will lose as a result of the enrolment drop will be greatly reduced because it no longer transfers tuition money to federated universities.