Reports show Laurentian has spent $20.9 million on restructuring so far


This includes nearly $5.4 million between January 8 and May 6 of this year; almost an additional $8 million is expected to be spent by September 30

Laurentian University spent $20.9 million on restructuring costs between the start of winter 2021 and the start of this month, according to cash flow information included in reports published by the firm Ernst & Young. , including the latest report published on May 27.

A running total of restructuring costs is not presented in the report, but the number can be obtained by adding the totals in five separate reports during Laurentian’s insolvency.

The university spent nearly $5.4 million on restructuring between Jan. 8 and May 6, 2022, according to the latest report from Ernst & Young, with the firm acting as the court-appointed monitor of the restructuring of Laurentian’s insolvency.

That’s actually less than the roughly $6.5 million that Ernst & Young predicted the university would spend on restructuring during that time.

The report said out-of-pocket restructuring costs were lower than expected by approximately $1.2 million, primarily due to the timing of payments.

In terms of interest and other charges on the $35 million debtor-in-possession (DIP) loan that Laurentian took out to support its finances during its restructuring, the university spent an additional $311,000 in this category of January 8 to May 6 (forecast was $359,000).

This means Laurentian has now paid $3.39 million in interest and fees on the DIP loans.

The Comptroller’s latest report also includes a cash flow forecast for the dates May 7 through September 30 of this year, forecasting nearly $8 million more in restructuring costs and $153,000 in interest and charges on DIP loans.

The DIP loan, which was previously granted by a private lender with an interest rate of 8.5%, was replaced on January 31 by a loan from the Ministry of Colleges and Universities of Ontario at a much lower interest rate. lower.

Specifically, the interest rate for this DIP loan agreement is based on “the province’s one-year cost of funds at the time of the advance”. For reference only, as of January 12, this rate was 1.052%.

Laurentian is continuing its restructuring after declaring insolvency and filing for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) more than a year ago on February 1, 2021.

The university will ask that the stay of proceedings protecting it from its creditors be extended again at a May 30 hearing, this time until September 30.

In his preliminary report on Laurentian University’s finances released in April, Ontario Auditor General Bonnie Lysyk commented on the restructuring costs paid by Laurentian.

“The planning and use of the CCAA has resulted in additional costs for the financially challenged university,” she said.

“As of early March 2022, Laurentian had paid over $24 million to outside attorneys and other consultants, including those who recommended and guided the CCAA restructuring process.

Although the cash flow reports mentioned above only cover financial information as of January 31, 2021, Laurentian has publicly announced fall 2020 that it had hired Ernst & Young to review its finances.

Lysyk said in the report that an outside law firm that worked with the university on other matters first introduced the concept of the Creditor Protection Process in 2019 to senior management.

“We believe serious consideration of the concept lay dormant until the spring of 2020, when Laurentian made the decision to actively pursue creditor protection,” she said in the report.

In the 13th Monitor’s report released May 27, Ernst & Young disputes at least one of the statements in Lysyk’s preliminary report.

Specifically, they took issue with the AG’s statement that “we believe Laurentian did not have to seek CCAA protection; he has strategically planned and chosen to take action to file for creditor protection with the Ontario Superior Court of Justice on February 1, 2021.”

“The Comptroller does not share this view,” said the 13th Comptroller’s Report, which goes on to say that it is essential that LU is given sufficient opportunity to review drafts of the final report in advance. AG and to provide factual corrections.

Heidi Ulrichsen is Associate Content Writer at It also covers education and the arts scene.


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