Judge clears way for Laurentian University’s restructuring plan

Laurentian University has gotten the approval it needs to terminate agreements with its three federated universities and borrow $10 million to fund its operations as it continues to restructure.

Justice Geoffrey Morawetz of the Ontario Superior Court also ruled Sunday that Laurentian will continue to be protected from creditors until Aug. 31.

Justice Morawetz did not elaborate on his reasons for his decisions, writing they will come later.

Debt-laden Laurentian University announced on Feb. 1 that it was insolvent, could no longer pay its bills and that it would seek protection under the Companies’ Creditors Arrangement Act. Laurentian is the first post-secondary school in Canada to use the act this way as it is usually reserved for private companies experiencing financial difficulties.

Administration officials then got a $25 million loan to continue to pay for its operations and then began to restructure, with an April 30 deadline. Since then, Laurentian has:

— Ended federation agreements with the University of Sudbury, Huntington University and Thorneloe University. Laurentian officials said it will now keep $7.7 million in funding it used to share with the federated universities;

— Struck new contracts with its faculty and staff unions, which calls for, among other things, cuts to pay;

— Cut 69 English and French programs; and

— Cut almost 200 union and non-staff jobs, and more than $30 million a year in salaries.

Laurentian then asked the court to approve its restructuring plan, including the severing of ties with the federated universities.

In hearings held Thursday, Laurentian’s lawyer, D.J. Miller told Justice Morawetz that if the federation agreements were not ended, Laurentian would fail and so would the federated universities.

Huntington did not oppose Laurentian’s plan in court and has struck a new agreement with the university. In the deal, Laurentian will acquire Huntington’s gerontology program. Huntington, meanwhile, will continue as an independent university and own and operate its buildings on the Laurentian campus, including its residence.

However, the University of Sudbury and Thorneloe University opposed Laurentian’s plan. The University of Sudbury lawyer argued Laurentian is using its financial troubles to “destroy” its federated universities.

The lawyer for Thorneloe University said Thorneloe will go bankrupt without the federation agreements, which, he said, were intended to last forever.

There was no immediate reaction from the University of Sudbury to Justice Morawetzs rulings; Thorneloe said it plans to appeal.

The University of Sudbury, Huntington University and Thorneloe University are religiously affiliated schools and can’t access public funding. As a result, in the early, 1960s, they helped create Laurentian University.

Each federated university offered programs, but Laurentian confers the degrees earned by students.

The University of Sudbury board has announced plans to create a French-language university, but that would need funding and provincial government approval.

It also offers Indigenous Studies, one of the first universities in Canada to do so.

Laurentian has said it despite the cuts, all students will be able to graduate.