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
From outer space? Sask. farmers baffled after discovering strange wreckage in field
A family of fifth generation farmers from Ituna, Sask. are trying to find answers after discovering several strange objects lying on their land.
NEW Iconic Canadian song turns 50
Andy Kim's 'Rock Me Gently' is marking a major milestone, as it celebrates its 50th anniversary.
Oprah Winfrey: I set an unrealistic standard for dieting
Oprah Winfrey said on Thursday evening that she has long played a role in promoting unhealthy and unrealistic diets.
Prince Harry, Meghan arrive in Nigeria to champion the Invictus Games and meet with wounded soldiers
Prince Harry and his wife, Meghan, arrived in Nigeria on Friday to champion the Invictus Games, which he founded to aid the rehabilitation of wounded and sick servicemembers and veterans, among them Nigerian soldiers fighting a 14-year war against Islamic extremists.
Countries struggle to draft 'pandemic treaty' to avoid mistakes made during COVID
After the coronavirus pandemic triggered once-unthinkable lockdowns, upended economies and killed millions, leaders at the World Health Organization and worldwide vowed to do better in the future. Years later, countries are still struggling to come up with an agreed-upon plan for how the world might respond to the next global outbreak.
Toronto police called to Drake's Bridle Path mansion for another alleged intruder on Thursday
Toronto police say a man who allegedly attempted to access Drake’s Bridle Path property was taken to hospital on Thursday after an altercation with security guards.
Ontario family receives massive hospital bill as part of LTC law, refuses to pay
A southwestern Ontario woman has received an $8,400 bill from a hospital in Windsor, Ont., after she refused to put her mother in a nursing home she hated -- and she says she has no intention of paying it.
Flat tire on a highway? Here's why you shouldn't try to fix it
If you're cruising down a highway and realize you have a flat tire, you may want to think twice before stopping to fix it on the side of the road.
Storm-battered U.S. South is again under threat. A boy swept into a drain fights for his life
Dangerous storms crashed over parts of the U.S. South on Thursday even as the region cleaned up from earlier severe weather that spawned tornadoes, killed at least three people, and gravely injured a boy who was swept into a storm drain as he played in a flooded street.