Deadline for Laurentian to complete insolvency process extended to Jan. 31

Sudbury -

An Ontario court has granted Laurentian University's application to extend insolvency proceedings to Jan. 31, 2022.

At a hearing Friday morning, Chief Justice Geoffrey Morawetz of the Superior Court of Justice also agreed to extend the deadline when the university has to repay emergency loans that has helped keep the school operating while it works its way through restructuring.

Known as DIP loans, that deadline has also been extended to Jan. 31.

Lawyer D.J. Miller, representing Laurentian, told the court a number of factors made the extensions necessary, including the uncertainty surrounding the COVID-19 pandemic.

University administrators have also spent a lot of time responding to requests from Ontario Auditor General Bonnie Lysyk.

Lysyk is conducting an extensive audit of LU's finances for a report detailing exactly what led the school to declare insolvency on Feb. 1 under the Companies' Creditors Arrangement Act.

"That is something the university is fully participating in," Miller said Friday. "But it is an added element that requires extensive resources."

The French language ombudsman is also conducting an investigation, she said, and staffing and COVID challenges also need to be addressed.

Together they present "tremendous challenges for the university," Miller said, making the extension necessary.

She said all labour grievances with the unions at the university that existed before the insolvency filing have been resolved, and the real estate review is progressing well.

The next steps in the process is determining a framework to emerge from bankruptcy and to negotiate with creditors, who are owed as much as $300 million.

As part of the process, Laurentian renounced agreements with its federated universities, including Thorneloe. Lawyer Andrew Hatnay, representing Thorneloe, told the court they are winding up operations.

Hatnay said they had 28 staff and faculty, but are now down to four people who are focused on winding up operations.

"Thorneloe is no longer offering courses," he said, other than 36 students taking theology courses being offered online.

"A skeleton crew is overseeing the wind-down of Thorneloe."

Morawetz said he had no problem granting the extension since it was unopposed and he's satisfied that LU is acting in good faith.

"Laurentian has demonstrated that significant progress has been made in the restructuring," he said.

Reasons for his approval of the application will be released in the coming days, Morawetz added.