SUDBURY — Faced with huge long-term debt and declining revenue due to COVID-19, Laurentian University has sought court protection from its creditors.
It is the first time in recent memory that a university has made the equivalent of a bankruptcy filing because its debts far exceed its assets and revenues.
In a press release Monday, Laurentian University President Robert Haché said despite being insolvent, the court filing would not affect day-to-day operations and students will not be affected.
“Any decisions that are made will continue to be made in the normal course and will be made in the best interests of those who rely on us to provide top quality education,” Haché said.
The filing, under the Companies’ Creditors’ Arrangement Act, comes after several financial pressures over the past 10 years, he said.
“These strains include a combination of factors such as historical recurring deficits, declining demographics in Northern Ontario, the closure of our Barrie campus in 2019, and tuition reductions and fee freezes. tuition that were implemented in 2019 and, more recently, various cost and revenue impacts due to the global pandemic,” Haché said.
“As we previously communicated, we are facing unprecedented financial challenges and our financial health is currently among the weakest in the province compared to other universities. We intend to change that.”
As part of the Creditor Protection Proceedings and at Laurentian’s request, Ernst & Young Inc. has been appointed as the Court-Designated Monitor. The role of the monitor is to help the school formulate and implement a restructuring plan under the supervision of the court.
Three month process
It should take about three months to complete this process, Haché said.
“I know this can be a stressful time of uncertainty for everyone,” he said. “For those who may need help dealing with this difficult news, I encourage you to seek support through our available mental health services.”
Sources speaking on CTV news background say the University approached the province before Christmas seeking help with what was thought to be $100 million in debt. But since then, a closer look at the books has revealed the amount is closer to $200 million, prompting the decision to seek creditor protection.
In a press release, the Ontario government announced that it has appointed a special advisor to help the Laurentines through its financial crisis.
“He is deeply concerned that this Laurentian University has found itself in a situation where such drastic and immediate action is necessary to ensure its long-term sustainability,” Ross Romano, Minister of Colleges and Universities, said in a statement. declaration.
“The government has appointed Dr. Alan Harrison as a Special Advisor to advise me on options to support Laurentian’s path to return to financial sustainability and ultimately drive long-term competitiveness and success. from Laurentian. Students at Laurentian University remain the government’s priority and we are focused on enabling them to continue their studies without interruption. »
Romano said the current situation is “unprecedented” and the government is considering a range of options to bring the situation under control.
This “could include the introduction of legislation to ensure the province exercises greater oversight over university finances and to better protect the interests of Ontario students and taxpayers,” Romano said in the statement.
“The government wants to ensure that this problem does not happen again at other institutions in the post-secondary education sector.”