Terminated faculty call for a 'no' vote to Laurentian's plan of arrangement

A committee representing some terminated faculty members at Laurentian University have issued an open letter, calling on creditors to vote against the school's plan of arrangement.

"The proposed plan is inadequate and unjust. It is a mix of rotten carrots and divisive threats designed to drive a majority into voting yes. We want a fair settlement. This one is not it," the letter reads.

"The main money carrot offered as an inducement to vote 'yes' amounts to only a small fraction of the money owed to us, and there is no guarantee that even this pittance will actually be paid to us."

According to the plan of arrangement, the school will only be able to pay 14 to 24 cents on the dollar for most money it owes.

"The reason is we are attempting to right what we believe are wrongs," said Eduardo Galiano-Riveros, the group’s spokesperson.

"We believe it's not acceptable and the calculus here is that by voting no to this plan of arrangement, the courts will then instruct both parties to go back to the negotiating table and come up with a plan of arrangement that has a legitimate chance to get a positive vote which will presumably be in better terms for all the creditors."

Laurentian University needs a 'yes' vote to be able to exit CCAA protection. In the plan of arrangement, it reads:

"If Laurentian cannot obtain the necessary support of its Affected Creditors to the Plan, it will be unable to resolve and settle its substantial debts. As a result, it is expected that the university will cease operating and will commence a liquidation process which would include a sale of all assets including all buildings and real estate. Laurentian has no ability to offer any additional recovery to Affected Creditors other than what is offered under the Plan."

Galiano-Riveros disputes that claim being made by the university.

"The Laurentian administration is portraying this as a binary proposition, in other words you either vote 'yes' to approve this vote, to approve this plan of arrangement and we move forward or you vote 'no', the plan gets struck down and the university automatically goes into liquidation and bankruptcy. We see there is a third option, you go into a second round of negotiations to come up with a more fair deal," Galiano-Riveros said.

The former Laurentian professor, who now teaches at McMaster University in Hamilton says legal precedence is on their side and plans of arrangement have been re-negotiated before including in the recent Canada Trust case.

"To try and install the narrative that it's either a yes vote now or we go into liquidation and bankruptcy just simply does not jive with legal precedence with the known facts."

In the meantime, the Laurentian University Faculty Association (LUFA) has issued a letter to its members asking creditors to withhold their vote until they've had a chance to address some of the outstanding issues with the school.

Fabrice Colin, the association president, says one of the outstanding issues is governance.

"In our case - we're not in a position yet where can recommend a vote yes to our members, so we're not in that position yet," Colin said.

Colin adds they are expecting to be very busy over the coming month as creditors near the September 14 vote.

If the plan is approved, it wouldn't return to court until early October.