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Laurentian has spent $20.9M on restructuring so far: reports

That includes close to $5.4M between Jan. 8 and May 6 of this year; nearly another $8M projected to be spent by Sept. 30
300522_laurentian university
Laurentian University.

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

A running total of restructuring costs is not presented in the report, but the number can be obtained by adding up the totals in five separate reports over the course of Laurentian’s insolvency.The university spent close to $5.4 million on restructuring between Jan. 8 and May 6, 2022, according to the latest report by Ernst & Young, the firm acting as the court-appointed monitor of Laurentian’s insolvency restructuring.

That is actually lower than the roughly $6.5 million Ernst & Young had projected the university would spend on restructuring during that time period.

The report said that disbursements related to restructuring costs were lower than forecast primarily due to the timing of payments.

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

That means Laurentian has now paid $3.39 million in DIP loan interest and fees.

The latest monitor’s report also includes a cash flow forecast for the dates May 7 to Sept. 30 of this year, projecting almost another $8 million in restructuring costs and $153,000 in DIP loan interest and fees.

The DIP loan, which was previously through a private lender with an interest rate of 8.5 per cent, was replaced as of Jan. 31 with one from the Ontario Ministry of Colleges and Universities at a much lower interest rate.

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

Laurentian continues to undergo restructuring after declaring insolvency and applying for creditor protection under the Companies’ Creditors Arrangement Act (or CCAA) well over a year ago, on Feb. 1, 2021.

The university will request the stay of proceedings protecting it from its creditors be extended once again during a May 30 court hearing, this time until Sept. 30.

In her preliminary report on Laurentian University’s finances released in April, Ontario Auditor General Bonnie Lysyk commented on the restructuring fees being paid out by Laurentian.“The planning for and use of CCAA has come with additional costs for the financially strapped university,” she said.“As of early March 2022, Laurentian had paid out more than $24 million to external lawyers and other consultants, including those who recommended and guided the CCAA restructuring process.”

While the cash flow reports referred to above only deal with financial information starting Jan. 31, 2021, Laurentian publicly announced in the fall of 2020 that it had hired Ernst & Young to review its finances.

Lysyk said in the report that an external law firm that was working with the university on other business first introduced the concept of the creditor-protection process in 2019 to senior administration. 

“We believe that 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 takes issue with at least one of the statements in Lysyk’s preliminary report. Specifically, they took aim at the AG’s statement that “we believe Laurentian did not have to file for CCAA protection; it strategically planned and chose to take steps to file for creditor protection in the Ontario Superior Court of Justice on Feb. 1, 2021.”

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

Heidi Ulrichsen is the associate content editor at She also covers education and the arts scene.