On Wednesday, the Ontario Superior Court of Justice approved the university’s plan of arrangement. The move means that in just a few weeks, Laurentian will be able to exit the Companies’ Creditors Arrangement Act process after over a year and a half of insolvency.
“This significant milestone should give confidence to those applying to Laurentian that they will be able to start and finish their degrees here,” the university wrote in a release. “Approval of the Plan by the Court allows the University to proceed to Plan Implementation, once the conditions to Plan Implementation have been satisfied.”
Laurentian has been under creditor protection since Feb. 1, 2021, when it first declared insolvency and formally entered the CCAA process.
To emerge from creditor protection, Laurentian has been undergoing a court-supervised restructuring that included drawing up a plan of arrangement to be put before its creditors.
On Sept. 14, Laurentian’s many creditors narrowly voted to approve the university’s proposed plan of arrangement, which set out a roadmap for the university to follow over the next few years that would ultimately deal with its debts.
Despite the courts approval of the plan, it will be nearly two months before it’s officially set in motion.
At the Oct. 5 hearing, the court also approved a motion brought forward by Laurentian to extend their stay period to Nov. 30. That means they will remain under creditor protection longer than initially expected when creditors voted on the plan last month.
The university said the extension would allow them to continue operating as usual, and give them more time to implement the plan.
Once Laurentian reaches the implementation date, they will have three years to fulfil their end of the deal, which includes paying back a small portion of the debts owed to each of their creditors.
Here are the key features of the plan:
– To generate the money necessary to repay creditors, the Province of Ontario will purchase $45.5 million to $53.5 million worth of real estate currently owned by Laurentian.
– The money accrued from the sale of real estate will go into a distribution pool, which will be used to distribute payments to creditors with proven claims.
– Creditors with a CCAA Priority Claim, a Secured Claim, or a Vacation Pay Compensation Claim, will receive their payments first, and will be repaid the amount they’re owed in full.
– Once priority payments are made, the amount remaining in the distribution pool will be divvied up on a pro rata basis, to determine how much money will be repaid to creditors with affected claims. Affected creditors are expected to be repaid only 14.1 to 24.2 per cent of the money they are owed.
– The payment distribution process is expected to take up to three years.
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Mia Jensen, Local Journalism Initiative Reporter, The Sudbury Star