Thorneloe University loses fight to reverse termination of its relationship with Laurentian University
The Court of Appeal for Ontario has rejected an attempt by Thorneloe University to reverse the decision by Laurentian University to terminate its relationship.
As part of its insolvency process, LU ended the federated university agreement it has had with Thorneloe, the University of Sudbury and Huntington University since the 1960s. Huntington reached a separation agreement with Laurentian, while the U of S and Thorneloe appealed to the courts, which sided with Laurentian.
Thorneloe appealed that ruling, and in a decision dated June 23, the appeals court sided with Laurentian.
"At the heart of its submissions is its contention that allowing the disclaimer will result in Thorneloe’s insolvency and yet provide only de minimis (minimal) financial benefit to Laurentian, and that the motive for the disclaimer is the elimination of competition, which is inconsistent with the duty to act in good faith," the three appeals judges wrote in their decision.
But under the Companies' Creditor Arrangement Act (CCAA), through which LU declared insolvency, when an agreement is disclaimed, courts must strike a balance between considering the harm to institutions like Thorneloe with the need for the insolvency process to succeed.
When there are no win-win decisions in cases like this, courts must make "the least undesirable choice."
The judge hearing the CCAA case said terminating the agreements with the three federated universities would result in an additional $7.7 million in increased revenue for LU. And that agreeing to maintain the agreement with Thorneloe would mean Huntington would receive the same treatment.
Under its deal with LU, "if Thorneloe or U Sudbury are permitted to continue to receive funding from Laurentian to teach courses or programs, Huntington will be similarly entitled," the transcript of the decision said.
'If Laurentian collapses, Thorneloe will collapse'
And terminating the agreement was also required by the DIP lender – the term for the group forwarding Laurentian loans for operations until the insolvency process is concluded.
Restoring Thorneloe's agreement with LU would have the effect of endangering the university's attempt to restructure, the court ruled.
"The CCAA judge found that if Laurentian collapses, Thorneloe will collapse," the transcript said.
"Thorneloe could only be an ongoing solvent entity if Laurentian could successfully restructure while keeping the agreements with Thorneloe in place. But that option was not available, as the CCAA judge accepted the monitor’s view that the disclaimer of the agreements was necessary for a viable restructuring of Laurentian to occur."
So in this case, the least undesirable decision is to allow the termination of the agreements to stand, the justices ruled.
"While we recognize the serious financial implications of the disclaimer for Thorneloe, we are simply not persuaded that there is an arguable basis for interfering with the CCAA judge’s factual findings or legal conclusions."
Read the full decision here.
CTVNews.ca Top Stories
Minister 'outraged' after AFN national chief's headdress taken from Air Canada cabin
The federal minister of Crown-Indigenous relations is calling on Air Canada to 'make things right' with the national chief of the Assembly of First Nations, who said her headdress was removed from an airplane cabin during a flight this week.
BREAKING Orca calf that was trapped in B.C. lagoon for weeks swims free
An orca whale calf that has been stranded in a B.C. lagoon for weeks after her pregnant mother died swam out on her own early Friday morning.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
'Violation': CSIS had officer investigated after she reported a superior raped her
A CSIS officer's allegations that she was raped repeatedly by a superior in agency vehicles set off a harassment inquiry, but also triggered an investigation into her that concluded the alleged attacks were a “misuse” of agency vehicles by the woman.
'Too young to have breast cancer': Rates among young Canadian women rising
Breast cancer rates are rising in Canada among women in their 20s, 30s and 40s, according to research by the University of Ottawa (uOttawa).
'I was scared': Ontario man's car repossessed after missing two repair loan payments
An Ontario man who took out a loan to pay for auto repairs said his car was repossessed after he missed two payments.
Canada recognizes housing as a human right. Few provinces have followed suit
As more Canadians find themselves struggling to afford or find housing, the country's smallest province is the only one that can point to legislation recognizing housing as a human right.
Charlie Woods, son of Tiger, shoots 81 in U.S. Open qualifier
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
Taylor Swift dons Montreal designer's dress in 'Fortnight' video
A pair of Montreal designers' work has now been viewed over 41 million times. Taylor Swift dons a Victorian throwback black gown in her latest music video, 'Fortnight', designed by UNTTLD due Simon Belanger and Jose Manuel Saint-Jacques.