Laurentian University gets judge's approval to stay open under creditor protection as it restructures

Insolvent Laurentian has cleared a critical obstacle to move forward with its plan to become financially stable, after a judge on Sunday agreed to allow the Sudbury, Ont., university to continue to operate while protected from creditors until Aug. 31.

Justice Geoffrey Morawetz of Ontario Superior Court has also given the university the go-ahead to cut ties with three federated universities, which will qualify Laurentian for a $10-million loan.

Morawetz's decisions following hearings last week come at the expense of the University of Sudbury, Thorneloe and Huntington.

In his decision, Morawetz said he will give reasons for overruling the court challenges from Thorneloe and the University of Sudbury when they can be translated into French. Huntington hadn't opposed the termination of its agreement in court, as it earlier worked out an agreement with Laurentian.

The three religiously affiliated schools, unable to access public funding on their own, came together in the 1960s to create Laurentian, which grew into a much larger entity.

Students enrolled at the federated universities expressed disappointment with Sunday's ruling. Some say they'll look at options outside Sudbury to complete their studies.

'Having to find a new home'

For Connor Lafortune, who is francophone and Indigenous, the decision means great personal upheaval. He had enrolled at the University of Sudbury to could learn in his language and experience his culture while maintaining ties to his home community nearby.

The University of Sudbury is bilingual, offering programs in English and French, and offers Indigenous programming.

"For me, letting go is a lot more than just changing universities, but really having to find a new home," said Lafortune.

Laurentian has offered to help students in the federated institutions complete their degrees by offering alternative courses, but that's not an option for Morgan Cashmore-Rouleau. She was in the department of women's, gender and sexuality program at Thorneloe. 

Cashmore-Rouleau said she'll finish her degree at both the University of Toronto and Carleton University in Ottawa, which facilitated her transfer.

"This notion that this is going to save Laurentian money because all these courses can now be offered at Laurentian is a farce, because I'm not doing that."

Laurentian declared insolvent Feb. 1

When the schools first came together, each federated partner struck their own agreements with Laurentian to retain their significant programming, which included francophone cultural studies and the first Indigenous studies program in Canada, but they didn't confer degrees of their own.

Those agreements, and now faculty and programming, are in question without the framework agreements with Laurentian that allowed them to operate.

Laurentian, the largest university in northern Ontario, was declared insolvent Feb. 1 and became the first post-secondary institution in Canada to enter restructuring under the Companies' Creditors Arrangement Act (CCAA), normally reserved for the private sector. Under the act, organizations are allowed to operate while sorting out their financial problems.

Since that time, unprecedented steps have been taken to reduce its debt load to meet restructuring goals by April 30. They included:

• Cutting dozens of programs, more than 100 faculty members, and dozens of staff and managers, including the vice-president of administration.
• New labour agreements were signed with the faculty and staff unions that included salary rollbacks.
• Those in key leadership positions also saw a percentage of their salaries rolled back.

Laurentian's court hearing April 29 sought approval of all the elements of its restructuring plan, including the dissolution of ties with the federated partners.

Laurentian's lawyer, D.J. Miller, told Morawetz that if the agreements weren't dissolved, Laurentian would fail. As a result, she argued, the federated universities would also go under.

Miller said Laurentian needs to retain the $7.7 million in grants and funding that would normally be disbursed to the federated partners to reassure its lender and qualify for another $10-million loan to keep it operating until the end of August.

Thorneloe to appeal decision

Thorneloe University says it plans to appeal Sunday's  decision to allow Laurentian to terminate the federated universities agreement. 

"Unless corrected by the Court of Appeal, this decision is devastating to our students, faculty and staff, as it enables Laurentian to move forward with its ill-conceived plan to close down the federated universities," Thorneloe president John Gibaut said in a release.

He said Thorneloe has no alternative but to cancel its Laurentian online classes for the spring semester, which were to begin Monday.

Thorneloe's theology programs will not be affected by the cancellations.

At the University of Sudbury, president John Meehan said it's unhappy with court decision.

"We believe that termination of the federation is not in the best interests of our students, faculty, employees and the communities we serve," he said in a release, adding his school is awaiting the reasons for the decision "to determine the next steps in this process."