Original Published on Sep 17, 2022 at 00:56
Not all people owed on board with payment plan – Laurentian University ‘least transparent institution ever had to work with’ says Ontario Auditor General
By Mia Jensen, Local Journalism Initiative Reporter
With the go-ahead from creditors, Laurentian is now closer than ever to emerging from over a year and a half of insolvency. Despite their victory, creditors who both supported and opposed Laurentian’s plan say that the fight is far from over.
“On the one hand, LUFA is pleased that the university creditors voted to approve the plan,” said Fabrice Colin, president of the Laurentian University Faculty Association. “On the other, it’s sad. It does not make up for all the pain and suffering inflicted on students, faculty members, staff members, and the community.”
On Wednesday, more than 87 per cent of the university’s creditors voted to support Laurentian’s proposed plan of arrangement, which outlined a proposal to repay the debts its owes as part of an to emerge from insolvency.
Since February 2021, Laurentian has been under creditor protection under the Companies’ Creditors Arrangement Act (CCAA). Now that creditors have officially declared their support for the university’s proposed plan, Laurentian can go to the court on Oct. 5 to seek final approval. If granted, the plan will officially be set in motion and the university will finally be out from under its mountains of debt.
Though LUFA supported the vote in favour of the plan, Colin said it did so only because faculty members knew it was the best offer they would get under the circumstances and the restrictions of the CCAA process.
“The CCAA proceedings were and still are totally inappropriate for post-secondary institutions like Laurentian,” he said Thursday. “We reiterated that on multiple occasions and that was also confirmed by the Auditor General of Ontario in their preliminary report.”
The report, released in April, sharply criticized the university’s lack of transparency and accountability throughout both leading up to its insolvency, and in the auditing process.
Colin said that culture is at the top of the list of what needs to change going forward.
“The Auditor General said the Laurentian University was the least transparent institution they had ever had to work with,” he said. “And there was a culture of fear among employees. Indeed, we think that some of the gains that were made last minute (to the plan of arrangement) will help to change that culture.”
Those gains include a commitment to ensuring that LUFA is given representation on all new committees created to review governance and operations issues, as well as a review of senior leadership and administration responsible for Laurentian’s financial crisis.
Going forward, Colin said LUFA will be advocating for new faculty positions, faculty complements, and the revival of some of the programs Laurentian has cut.
It has also committed to pursuing legal actions against university directors and officers responsible for the loss of the Retiree Health Benefits Plan.
Though the work is ongoing, Colin said he’s glad to see this step taken.
“I would like to extend our gratitude to all the supporters across the country,” he said. “It’s because of all that solidarity that Laurentian University has a future now.”
For those who voted against the plan, like members of the Terminated Faculty Committee, the result of the vote didn’t come as a surprise.
“We knew all along that it was a long shot with a lot of headwinds against us,” said spokesperson Eduardo Galiano-Riveros. “But I think we moved the needle in spite of that.”
He said Laurentian’s announcement on Sept. 9 to an amendment to shorten the proposed payout period from four years to three, just days before the vote, is proof that their advocacy made an impact.
“We interpret that as yielding in part to the pressure our group was exerting,” he said. “So we’re proud of what we achieved. We sent a strong message that all is not well, that this was not a landslide. This was a fight we probably knew we couldn’t win, but it had to be fought because of its inherent correctness.”
In the coming months and years, Galiano-Riveros said the terminated faculty will be continuing to monitor the implementation of the plan closely. He said that they will also be requesting the release of documents sealed by the court once the CCAA protections are lifted.
“We want to better understand what happened, why it happened, see who is responsible, and what can be done to prevent it from happening to other post-secondary institutions in Canada,” he said.
They are also anxiously awaiting the release of the final report by the Auditor General, which they hope will give a better picture of what happened behind the scenes.
Under the plan of arrangement, affected creditors — which include former faculty members — will only be repaid 14.1 to 24.2 per cent of the money owed to them. The low rate has been a particular cause of concern for the terminated faculty.
Now that the plan is on its way to final approval, Galiano-Riveros said he isn’t expecting Laurentian to go above and beyond its legal obligations when it comes to compensating creditors.
“I just do not see it happening, when they fought tooth and nail to reduce that number to its minimum in the first place,” he said. “Obviously, this is going to impact a lot of people. Careers were cut short, and many of them had little if any prospects of having the good fortune of being picked up by another Canadian university. It’s a death sentence to a lot of careers and livelihoods.”
As for rebuilding trust, Galiano-Riveros said that’s the university’s job to figure out.
“A lot of creditors voted against this,” he said. “They have been given a clear signal. We’re going to give you this opportunity to right the wrongs, but we are watching you, and you do not have full support.”