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
Grandparent scam: London, Ont., senior beats fraudsters not once, but twice
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
Deaths of 4 people on Sask. farm confirmed as murder-suicide
The deaths of four people on a farm near the Saskatchewan village of Neudorf have been confirmed a murder-suicide.
CRA no longer requiring 'bare trust' reporting in 2023 tax return
The Canada Revenue Agency announced Thursday it will not require 'bare trust' reporting from Canadians that it introduced for the 2024 tax season, just four days before the April 2 deadline.
Full parole granted to man convicted in notorious 'McDonald's murders' in Cape Breton
The Parole Board of Canada has granted full parole to one of three men convicted in the brutal murders of three McDonald's restaurant workers in Cape Breton more than 30 years ago.
Incident on Calgary's Reconciliation Bridge comes to safe resolution
Calgary police shut down a number of bridges into and out of the downtown core as officers dealt with a distraught individual. The incident lasted almost 20 hours.
Sunshine list: These were the Ontario public sector's highest earners in 2023
Ontario released its annual sunshine list Thursday afternoon, noting that the largest year-over-year increases were in hospitals, municipalities, and post-secondary sectors.
George Washington family secrets revealed by DNA from unmarked 19th century graves
Genetic analysis has shed light on a long-standing mystery surrounding the fates of U.S. President George Washington's younger brother Samuel and his kin.
'We won't forget': How some Muslims view Poilievre's stance on Israel-Hamas war
A spokesman for a regional Muslim advocacy group says Conservative Leader Pierre Poilievre's stance on the Israel-Hamas war could complicate his party's relationship with Muslim Canadians.
Why some Christians are angry about Trump's 'God Bless the USA' Bible
Former U.S. President Donald Trump is officially selling a copy of the Bible themed to Lee Greenwood’s famous song, 'God Bless the USA.' But the concept of a Bible covered in the American flag has raised concern among religious circles.