Unsealed documents: Here is what LU didn’t want you to see
Unsealed documents are shedding new light on the discussions between the province and the school leading up to Feb. 1, 2021, insolvency declaration by Laurentian University.
The documents are being released now that Laurentian has emerged from the institutional form of bankruptcy.
In particular, the documents show determined efforts by former LU president Robert Haché to convince the Ministry of Colleges and Universities (MCU) that a declaration under the Companies’ Creditors Arrangement Act was clearly the best option.
Among the arguments was the “risk” the university faced if it became public that $38 million in bursary and other donations was missing, swallowed up in a general revenue account to help fund operating deficits.
In a letter dated Jan. 25, 2021, Haché said they realized those funds weren’t in a separate account in December 2020 and they took immediate action.
They took steps “to ensure that funds received for a specific purpose are held in segregated accounts and only available to be used for the stated purpose,” he wrote.
When combined with the fact LU could not take on any new debt, the university faced a fiscal squeeze, Haché said.
“The combined effect of those two facts, while necessary, has created an immediate liquidity crisis,” he wrote in the letter.
At the time, MCU was offering Laurentian $12 million to keep operating while it considered Haché’s request for a $100 million bailout. But Haché said that wouldn’t work, because the $12 million estimate already assumed LU was declaring insolvency.
“That cash flow forecast was expressly prepared on the assumption of, and in contemplation of a proceeding being commenced by Laurentian University under the Companies’ Creditor Arrangement Act,” he wrote.
“It was prepared on the basis that a court-ordered stay of proceedings is in place which authorizes Laurentian University to make no payments in respect of existing indebtedness and avoids certain costs that might be incurred as a result of other issues facing Laurentian University.”
Haché also argued that delaying the CCAA declaration for two months would give LU’s faculty union enough time to mess up his plans – and alert the public that bursary funds had been misspent.
“They intend to go to the Labour Board next week asserting that Laurentian University is not bargaining in good faith, and has asserted financial distress but has not triggered the financial exigency process under the collective agreement,” he wrote.
“LUFA will also seek production of documents that put our financial position, including the historical practice of not setting aside restricted funds, into the public domain. This will occur without the protection of the stay of proceedings that is available through a CCAA proceeding.”
COULD CREATE 'IRREPARABLE HARM'
Should LUFA begin the financial exigency process, Haché wrote that “those events are incapable of being reversed at a later date by a CCAA court.”
“A delay of two months could therefore create irreparable harm for Laurentian University’s efforts to effect a restructuring.”
LU needed to cut 120 full-time jobs and dozens of programs, Haché said, and quickly.
“We see no scenario in which these reductions would be voluntarily agreed to by LUFA (or by Senate, which is controlled by faculty who are members of LUFA) or could be achieved in the near term outside of the type of setting created by a CCAA proceeding,” he wrote.
“Even if it could be achieved outside of a CCAA proceeding, it would require years of attrition from voluntary departures (which may not ultimately be the same people who would be deemed most appropriate), and substantial severance obligations.”
The estimated severance pay would be about $48 million, he said, something Laurentian could not afford.
Haché opposed Auditor General Bonnie Lysyk’s attempts to access these and other confidential documents but was eventually ordered to turn them over by the Ontario legislature.
He resigned last July.
Read the full documents here.
CTVNews.ca Top Stories
BREAKING Iran fires air defence batteries in provinces as explosions heard near Isfahan
Iran fired air defence batteries early Friday morning as explosions could be heard near a major air base near Isfahan, raising fears of a possible Israeli strike following Tehran's unprecedented drone-and-missile assault on the country.
American millionaire Jonathan Lehrer denied bail after being charged with killing Canadian couple
American millionaire Jonathan Lehrer, one of two men charged in the killings of a Canadian couple in Dominica, has been denied bail.
Nearly half of China's major cities are sinking, researchers say
Nearly half of China's major cities are suffering 'moderate to severe' levels of subsidence, putting millions at risk of flooding especially as sea levels rise.
Prince Harry formally confirms he is now a U.S. resident
Prince Harry, the son of King Charles III and fifth in line to the British throne, has formally confirmed he is now a U.S. resident.
Judge says 'no evidence fully supports' murder case against Umar Zameer as jury starts deliberations
The judge presiding over the trial of a man accused of fatally running over a Toronto police officer is telling jurors the possible verdicts they may reach based on the evidence in the case.
Health Canada to change sperm donor screening rules for men who have sex with men
Health Canada will change its longstanding policy restricting gay and bisexual men from donating to sperm banks in Canada, CTV News has learned. The federal health agency has adopted a revised directive removing the ban on gay, bisexual and other men who have sex with men, effective May 8.
Colin Jost names one celebrity who is great at hosting 'Saturday Night Live'
Colin Jost, who co-anchors Saturday Night Live's 'Weekend Update,' revealed who he thinks is one of the best hosts on the show.
Sports columnist apologizes for 'oafish' comments directed at Caitlin Clark. The controversy isn't over
A male columnist has apologized for a cringeworthy moment during former University of Iowa superstar and college basketball's highest scorer Caitlin Clark's first news conference as an Indiana Fever player.
'Shopaholic' author Sophie Kinsella reveals brain cancer diagnosis
Sophie Kinsella, the best-selling author behind the 'Shopaholic' book series, has revealed that she is receiving treatment for brain cancer.