Laurentian University Faculty Association files claim against board of directors and senior executives
Laurentian University Faculty Association (LUFA) Considering Alternative Compensation Option for Members As University of Sudbury, Ontario Undergoes Restructuring Under the Companies’ Creditors Arrangement Act (LACC).
He filed a claim alongside the existing claims process to help recover losses from restructuring due to the university’s declaration of insolvency on February 1.
Dozens of programs and over 100 faculty members have been cut to cut costs.
LUFA filed a claim for the directors and officers under the insurance that the university now holds. The claim seeks to access funds from insurance policies that cover senior executives, past and present, against lawsuits.
The president of the LUFA, Fabrice Colin, said in this case that includes the board of governors and some senior administrators.
No lawsuits can be brought against Laurentian University at this time, as the university is still under the protection of the court through CCAA proceedings, which allows it to operate while dealing with its financial problems. .
Colin said the issues in dispute include possible misuse and loss of funds, such as the RHPB (retiree health plan), research funds, professional allowances and the loss of sabbatical credits for members. of the licensed faculty.
The university is monetizing assets and finding efficiencies to ultimately determine how much it can put into a pool of money to satisfy creditors, whose banks are on the front lines, with claims. of at least $ 100 million.
Other creditors, such as faculty members, are considered unsecured creditors and expect to receive pennies on the dollar for their claims.
The D&O claim is an effort to earn a little more compensation on top of the existing claims process.
“We’re trying to make, you know, our current and licensed members as complete as possible,” Colin said. “We realize that won’t be possible, but that’s the mechanism or the process at our disposal right now.”
The forensic monitor who oversees the CCAA process for Laurentian, Ernst & Young, wrote that many of the funds Colin describes as “poorly managed” were “mixed” into one account and then lost when the university went. declared insolvency on February 1.
He said Laurentian paid all of its expenses out of this main operating account.
Moreover, he said, it was not a rare practice among universities.
Ernst & Young further explained that most universities have sufficient cash reserves to cover these obligations. However, in Laurentian’s case, due to its historic deficits and other issues, Laurentian did not have enough money to cover everything.
Colin said the amount faculty members might ultimately receive depends on whether the insurance company deems them valid, the number of valid claims and their corresponding amounts, and the limits of the insurance policy. .
He did not have a settlement period.
Laurentian says claim will be processed in due course
Laurentian University sent a statement in response.
“The claims process is administered by the court-appointed monitor pursuant to a claims process order and a court-issued compensation claims process order, the terms of which were developed by the monitor and Laurentian. in discussions with our union partners and other stakeholders, ”the statement read.
“All claims will be dealt with through this court-supervised claims process.”
Laurentian expects to have a plan to deal with creditors and opt out of the CCAA by Jan.31.