Laurentian University starts 'new chapter' with important vote, says union

A vote in favour of Laurentian University's plan of arrangement begins a "new chapter" for the Sudbury, Ont., university as it sets the stage to exit insolvency proceedings that have lasted 19 months.

"Today is the beginning of a new chapter for Laurentian University," said Fabrice Colin, president of the Laurentian University Faculty Association.

"As the long and painful CCAA process draws to a close, we can finally begin the work of restoring our university's integrity as well as the programs and jobs cut because of bad management and an irresponsible provincial government."

Wednesday morning, 522 of Laurentian's creditors voted in favour of the plan, representing 87.4 per cent of eligible voters.

It's not the outcome that we had hoped for.- Eduardo Galiano-Riveros, former Laurentian faculty member

For the plan to be approved, the yes votes also needed to represent two-thirds of the value of the claims Laurentian owed. They represented 68.9 per cent of the value of those claims, just over the 66.6 per cent threshold needed.

Colin said that while he was pleased with the outcome, Laurentian shouldnever have had to rely on the Companies' Creditors Arrangement Act (CCAA) to put its financial house in order.

In April 2021, two months after Laurentian filed for insolvency, it cut 69 programs and fired nearly 200 staff and faculty members.

Many of those terminated staff and faculty members voted Wednesday morning. Now that the plan of arrangement has been approved, they can expect to get anywhere from 14 per cent to 24 per cent of the money they were owed.

Eduardo Galiano-Riveros, a former Laurentian physics professor who lost his job last April, said he was disappointed with the result of Wednesday's vote.

"It's not the outcome that we had hoped for," he said.

Galiano-Riveros, who now works at Hamilton's McMaster University, is part of a group that represents some of the 111 faculty members who lost their jobs in 2021.

He said his court-approved claim for 18 years of service with Laurentian was valued at $561,000.

"So if you take 20 per cent of that, what do you get? A little over $100,000, or $110,000, somewhere in that range."

But ahead of the vote Laurentian said it would cease to exist if the plan of arrangement had not been approved.

"If Laurentian cannot obtain the necessary support of its affected creditors to the plan, it will be unable to resolve and settle its substantial debts. As a result, it is expected that the university will cease operating and will commence a liquidation process which would include a sale of all assets including all buildings and real estate," the university said in an online FAQ.

Galiano-Riveros and other terminated faculty members argued there was precedent that showed the plan could have been renegotiated if the vote had failed.

Jeff Bangs, the chair of Laurentian's board of governors, said he was relieved by the vote's result, but it showed there remains a lot of work to do.

"I think we have some work to do on mending fences, rebuilding relationships and earning people's trust in the future," he said.

The province appointed Bangs to Laurentian's board in December 2021 in an effort to clean house. Since that time, every board member who was present when the university got into financial difficulties either resigned, or was let go.

Robert Hach, Laurentian's president, and Marie-Jose Berger, the university's provost, are set to retire from their roles once Laurentian exits its insolvency proceedings. That is expected to happen after Oct. 5, when Laurentian is scheduled to get court approval for its plan of arrangement.

Sudbury MPP Jamie West, himself a Laurentian graduate, said he hopes Laurentian will be able to rebuild its reputation as it begins its next chapter.

In April, Ontario Auditor General Bonnie Lysyk published her "Preliminary Perspective on Laurentian University," which said "poor management of its financial affairs," were big factors in Laurentian's insolvency.

West said he would like the final report to provide answers on exactly what went wrong.

"The reality is people in Sudbury want to know what happened to this university that we sort of felt was stable," he said.