Laurentian University, a public university located in Greater Sudbury, Ontario with over 8,000 students, filed for protection under the CCAA on February 1, listing approximately $321.8 million in liabilities, including $71.6 million to RBC, $18.4 to TD, and $1.3 to BMO. The University cited widening deficits, declining enrolment, and costs related to the COVID-19 pandemic for its financial difficulties. Since the 2014-2015 fiscal year, the University has experienced operational deficits in the millions of dollars each year. With the exception of modest growth experienced in 2020, enrolment has declined each year from 2015 to 2018 and tuition fees remain low, while labour and debt servicing costs have grown substantially. The annual cost to educate each student at the University is approximately $2,000 higher than the average cost when compared to other Ontario universities, and there are far more faculty members than required. Although the University has made efforts to reduce administrative costs, this has resulted in a situation in which the reduced administrative staff has limited ability to focus on potential revenue-generating projects. As part of its efforts to address these operational and financial issues, the University intends to reduce the number of departments and programs it will offer, which cannot be accomplished in a timely manner outside of a CCAA proceeding. Since the University — as a publicly-funded entity — is subject to information requests, it will also be seeking an order that the stay of proceedings also suspends the requirement that the University respond to such information requests during the duration of the CCAA proceedings. During these proceedings, the University will be receiving up to $25.0 million in DIP financing from Firm Capital Mortgage Fund Inc. EY was appointed monitor. Counsel is TGF and Hicks Morley (labour counsel) for the University, Stikeman Elliott for the monitor, Fogler Rubinoff for the DIP lender, Blakes for RBC, Fasken for TD, and Chaitons for BMO.
Academie Linguistique Internationale Inc., a Montreal, Quebec-based company that operated a language school for learning French and English, filed for bankruptcy on December 1, listing approximately $1.0 million in liabilities and $130.0 thousand in assets. Since the company's clientele was comprised of mainly students from abroad, the closure of borders in the spring of 2020 forced the company to cease operations. PwC is the Bankruptcy Trustee.
Skillsoft Canada, as the foreign representative of Skillsoft, a US educational technology company which provides cloud-based learning solutions, had its Chapter 11 proceedings recognized in Canada under the CCAA on June 19. The primary purpose of the Chapter 11 proceedings is to implement a pre-negotiated, consensual restructuring that will reduce the company's existing balance sheet liabilities from $2.1 billion to $585.0 million. In recent years, the company has faced several challenges that have adversely impacted the operating performance of its business, including customer attrition resulting from steep market competition as well as the company's difficulty adapting its business model to address market shifts. In 2019, the company launched a successful transformation plan aimed at stabilizing the business. Despite increased order intake, customer renewal rates and new business, however, the company remains over-levered, with looming debt maturities in 2020 and 2021. Richter was appointed information officer. Counsel is Stikeman Elliott for the company, Fasken for the information officer, Osler for an ad hoc group of first lien and second lien lenders, and Goodmans for an ad hoc group of first lien lenders.
Medlantis, a Toronto, Ontario-based company that was incorporated by Dr. Kieran Murphy to acquire an online medical education platform originally developed and operated by the University Health Network, filed for bankruptcy on January 22, listing $5.1 million in liabilities, including $2.4 million to Dr. Helmut Schuehsler and $1.3 million to Dr. Murphy. The company's technology allows for data mining of thousands of hours of medical lectures, cases, procedures, workshops, and demonstrations, designed to make expert clinical answers accessible to everyone, everywhere, fast. Despite its promising potential, the company struggled to generate subscription revenues and over time began to fall in arrears with its suppliers. After attempts to raise additional capital proved unsuccessful, the company filed an assignment in bankruptcy. Link & Associates is the bankruptcy trustee.
Quest University Canada, a Squamish, British Columbia-based private, not-for-profit post-secondary institution, filed for protection under the CCAA on January 16, listing approximately $47.5 million in liabilities, including $16.0 million to Vanchorverve Foundation. Since the university commenced operations in 2007, it has not generated sufficient revenue to cover operating costs and the carrying costs associated with legacy debts incurred in its start-up. As such, the university requires CCAA protection to provide students with the opportunity to complete the academic year, while creating economic stability for the university's coming years. On January 27, the court approved the university's request for an extension of the stay of proceedings to May 29. The university also secured a $5.0 million loan from RCM Capital Management. Vanchorverve, the university's largest secured lender, had wanted the university to obtain the $5.0 million loan from Burley Capital and had unsuccessfully requested that the court replace four of the university's board members with appointees chosen by Vanchorverve. PwC, which was appointed monitor, advised that given the history between Vanchorverve's manager, Blake Bromley, and the university, interim financing should be provided by a third party lender. Counsel is Dentons for the university, McMillan for the monitor, and Murphy & Company and McCarthy Tétrault for Vanchorverve.
Student Federation of the University of Ottawa, the former official students' union representing undergraduate students of the University of Ottawa, was placed in receivership on April 15 by its own application. Formed in 1969, the federation uses fees collected from the approximately 36,000 undergraduate students to operate various businesses, service centers and social programming for the benefit of its members and other individuals frequenting the university campus. In September 2018, the university terminated its agreement with the federation as a result of allegations of financial mismanagement. A referendum was subsequently held in February 2019 and students voted for a new student union to represent them. With no role to fill on campus, the federation applied for a receiver to develop and then implement an action plan to affect a legal and operational unwinding of the federation. PwC was appointed receiver. Counsel is Dabrowski Joseph for the applicant and Dentons for the receiver.
Hatsize Learning, a Calgary, Alberta-based provider of cloud-based training solutions for various computer software products, was placed in receivership on August 3 on application by BMO, owed approximately $1.2MM. Deloitte was appointed receiver. Gowling WLG is counsel to the applicant.