Cv-21-656040-00Cl Ontario Superior Court of Justice

Court File No.: CV-21-656040-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. c-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY

MOTION RECORD

(Motion by Thorneloe University for an order that federation agreements are not to be disclaimed or resiliated)

April 15, 2021 KOSKIE MINSKY LLP 20 Queen Street West Suite 900, Box 52 Toronto, ON M5H 3R3

Andrew J. Hatnay - LS#: 31885W [email protected] Tel: 416-595-2083 / Fax: 416-204-2872

Sydney Edmonds - LS#: 79946K [email protected] Tel: (416) 595-2260 / Fax: (416) 204-4936

SUPREME ADVOCACY LLP 340 Gilmour St., Suite 100 Ottawa, ON K2P 0R3

Eugene Meehan, Q.C. - LS#: 29046T [email protected] Tel: (613) 695-8855 / Fax: 613-695-8580

Counsel for Thorneloe University

TO: SERVICE LIST - 2 -

TABLE OF CONTENTS

TAB DESCRIPTION

1 Notice of Motion dated April 15, 2021

2 Affidavit of Sydney Edmonds, sworn April 15, 2021

A Exhibit A: Federation Agreement between Laurentian University of Sudbury and Thorneloe, dated 1962

B Exhibit B: Laurentian University and Federated Institutions Proposed Grant Distribution and Service Fees, dated November 10, 1993

C Exhibit C: Laurentian University Financial Distribution to Federated Universities, between Laurentian and Thorneloe, effective as of May 1, 2019

D Exhibit D: Notice of Laurentian University of Sudbury to Disclaim or Resiliate an Agreement, dated April 1, 2021

E Exhibit E: Letter from Andrew J. Hatnay (Koskie Minsky LLP) to D.J. Miller (Thornton Grout Finnigan LLP) dated April 2, 2021 objecting to the Notice of Disclaimer of Laurentian

F Exhibit F: Web article entitled Our Campus in the 1960s regarding the history of Laurentian

G Exhibit G: News article by the Sudbury Star entitled How to fix Laurentian University without gutting it dated April 14, 2021

H Exhibit H: News article by CBC News entitled 'An ugly stain for years to come': Laurentian University students, staff reeling from cuts dated April 13, 2021

I Exhibit I: News article by the Sudbury Star entitled Growing anger, bitterness over Laurentian cuts dated April 14, 2021

J Exhibit J: News article by the Sudbury Star entitled Laurentian cuts could take more than $100 million out of Sudbury's economy dated April 14, 2021

3 Affidavit of John Gibault, to be sworn

TAB 1 Court File No.: CV-21-656040-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. c-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY

NOTICE OF MOTION

(Motion by Thorneloe University under section 32(2) for an order that Federation Agreements are not to be disclaimed or resiliated)

Thorneloe University, a university pursuant to An Act to Incorporate Thorneloe

University, S.O. 1960-1961, c. 135 ("Thorneloe"), will make a motion pursuant to section 32(2) of the Companies' Creditors Arrangement Act, R.S.C. 1985, C. c-36

("CCAA") to a judge presiding over the Commercial List, on a date to be scheduled by the Commercial List Office at Toronto, Ontario.

PROPOSED METHOD OF HEARING: The motion is to be heard orally or by video conference. - 2 –

THE MOTION IS FOR:

1. AN ORDER, if necessary, that the time for service of the Notice of Motion and the Motion Record is hereby abridged and validated and that further service thereof is dispensed with;

2. AN ORDER in accordance with section 32(2) of the CCAA that the two agreements in the Notice of Disclaimer of Laurentian University ("Laurentian") dated

April 1, 2021 are not disclaimed or resiliated:

● the Federation Agreement between Laurentian and Thorneloe dated 1962

(the "Federation Agreement"); and

● the Financial Distribution Notice between Laurentian and Thorneloe dated

May 1, 2019, amending the Proposed Grant Distribution and Services Fees

agreement between Laurentian, the University of Sudbury, Thorneloe

University, and Huntington University dated November 10, 1993 (the

"Financial Distribution Notice") (collectively, the " Agreements");

3. Costs; and

4. Such further and other relief as counsel may advise and this Court may deem just. - 3 –

THE GROUNDS FOR THE MOTION ARE:

5. On February 1, 2021, Laurentian was insolvent and obtained protection from its creditors under the CCAA. The accounting firm of Ernst & Young ("E&Y") was appointed as Monitor.1

6. On February 5, 2021, the CCAA Court appointed Justice Sean Dunphy to act as a judicial mediator among the major stakeholders.

7. This CCAA proceeding is unique in many respects including: a) it is the first time in Canada that the CCAA has been extended to grant creditor protection to a public university; b) a judicial mediator was appointed immediately after the CCAA filing; and c) the timetable to reach a new collective agreement with Laurentian's unions was very short.

8. On April 1, 2021, two months after obtaining CCAA protection, Laurentian delivered a Notice of Disclaimer to counsel for Thorneloe seeking to disclaim the

Agreements.

9. The next day, counsel to Thorneloe sent a letter to counsel to Laurentian stating that Thorneloe would apply to the Court under section 32(2) of the CCAA for an order prohibiting the disclaimers, and to discuss a litigation schedule for the motion.

1 E&Y had been previously engaged by Laurentian about four months before the CCAA filing on or around October 1, 2020 as its financial advisor. - 4 –

10. Thorneloe did not cause Laurentian's financial problems, does not "cost"

Laurentian money, and should not be Laurentian's scapegoat as a distraction from its own mismanagement.

11. The financial advisor retained by Thorneloe after the commencing of the CCAA proceedings has concluded that the disclaimer of the Federation Agreements will cut off

Thorneloe from provincial funding, will certainly result in "significant financial hardship" and precipitate Thorneloe's own insolvency filing, while making no material improvement to Laurentian's financial position.

12. Given that Thorneloe cannot survive on its own, the objective behind the disclaimers sought in this case is to close down Thorneloe, a university established by statute and was established expressly to be federated with Laurentian at the time of the universities' inception around 1960.

13. As such, the disclaimers would further tear the fabric that makes up Laurentian for over 60 years, and would force Thorneloe to close down and ultimately seek an insolvency filing of its own. The disclaimers would further traumatize the Laurentian student body and staff, run down Laurentian's reputation, cause collateral economic damage, and further demoralize the Sudbury community that is already strained by

Laurentian's largely self-inflicted financial predicament and the mass faculty terminations and course cancellations.

14. The disclaimers sought by Laurentian in this case are not simply in respect of a commercial relationship which section 32 is aimed at when Parliament added the - 5 –

provision to the CCAA September 18, 2009 to codify CCAA caselaw that dealt with contract terminations by a CCAA debtor. Section 32 is not intended by Parliament to be used to dismantle a public university.

15. Laurentian's attempt to terminate the Agreements with Thorneloe is an overreach of the CCAA protection granted to it by the Court which is to give it breathing room to allow it to restructure and address the financial and administrative problems that led to its insolvency.

16. Laurentian is acting in bad faith contrary to section 18.6 of the CCAA.

17. In addition to being federated with Laurentian, Thorneloe is also a creditor of

Laurentian for amounts owing to it for tuition collected from students and for grants paid in respect of Thorneloe courses by the Ontario government, and which Laurentian has not forwarded to Thorneloe.

History of the Federated Universities and the creation of Laurentian

18. To set the context for this motion in this unique CCAA proceeding, it is important to understand the history of Thorneloe and the other two federated universities,

Huntington University and the University of Sudbury (collectively with Thorneloe, the

"Federated Universities"), and that they were all established as part of project to bring university level education to northern Ontario in 1960.

19. Around 1960, three churches, the Anglican, Roman Catholic and United churches, each decided to establish universities to provide university-level education for the - 6 –

northern region around Sudbury. Until that time, northern Ontario had scant resources to teach students at the university level, leaving the region poorly serviced for higher education. The churches stepped in to fill the educational void.

20. The United Church established Huntington University in 1960 and the Roman

Catholic Church established the University of Sudbury, the successor to Collège Sacré

Coeur, in 1957.

21. Thorneloe was established on March 29, 1961 when the Anglican Diocese of

Algoma made an application to the Legislature of Ontario for the incorporation of

Thorneloe and An Act to Incorporate Thorneloe University received Royal Assent. All of the Federated Universities have degree-granting authority pursuant to their incorporating statutes. The Federation Agreement provides that "Thorneloe University shall suspend all its degree-conferring powers except the power to grant degrees in Theology".

22. As the churches were establishing the three universities they knew that they faced another obstacle to providing education to northern Ontario students: religious-affiliated universities are not eligible for funding from the Ontario government. This government policy originates from an 1868 statute2 and remains in place today.

23. To solve the funding problem, the three churches collaborated and, working with the Ontario government, agreed to also establish a bilingual, non-denominational university, which would be Laurentian University. The churches and the government

2 An Act for Granting to Her Majesty certain sums of money required for Defraying the Expenses of Civil Government for the year 1869; for making good certain sums Expended for the Public Service in 1868, and for other purposes, S.O. 1868-1869, c. 1. - 7 –

agreed to an approach whereby the Federated Universities would "federate" with the new

Laurentian, enabling them to obtain provincial funding that would flow to them from the

Ontario government but through Laurentian.

24. In 1960, following the negotiations with the three churches, the Ontario government established Laurentian and ultimately provided it with a large track of land on the shore of Ramsey Lake in Sudbury, which is its current location.

The Federation Agreements

25. All three of the Federated Universities entered into federation agreements with newly-created Laurentian and agreed to provide courses for all students. The intention by the parties was that all four universities would be academically and administratively interconnected, operate as one university, and that the three federated universities would be able to receive public funding flowing through Laurentian.

26. The arrangement was reflected in the federation agreements entered into by each of the Federated Universities around 1960-1961. The intention and spirit of cooperation and collegiality is evident in the unique nature of the agreements. Thorneloe's Federation

Agreement of 1962, like those of the other Federated Universities, shows the intention of the parties to be joined into a permanent federation arrangement and expressly states that the two universities "declare and express the firm hope and conviction that the

[federation] relationship between the universities … will be permanent" and that

Laurentian and Thorneloe will work together to "build a great institution of learning - 8 –

which shall forever be bilingual and non-denominational in its character".3 Consistent with that intention, the Federation Agreement does not contain any termination provisions.

27. The federated university structure is not unique to Laurentian. The Canadian universities listed in Schedule "A" hereto also have federated arrangements.

28. The flow of funds between Laurentian and Thorneloe is reflected in the second

Agreement, called the Financial Distribution Notice, which is also the target of

Laurentian's disclaimer.

29. The Financial Distribution Notice sets out terms for the flow of public grants and other funds to Thorneloe through Laurentian, pursuant to formulae in respect of the courses that Thorneloe provides that form part of Laurentian's Faculty of Arts course curriculum. As indicated below, this flow of funds does not "cost" Laurentian any material amount of money.

Thorneloe and Laurentian are highly integrated and operate as "one university"

30. Given that the three churches established the three Federated Universities and

Laurentian to operate as one university, there is a high degree of academic amalgamation and highly integrated administrative operations between Laurentian and Thorneloe.

3 Emphasis added. - 9 –

31. Thorneloe leases land on the Laurentian campus, on which Thorneloe has erected buildings for lecture halls, a student residence, administration offices, a theatre and a chapel.

32. Thorneloe physically houses three academic departments that are integrated with the Laurentian Faculty of Arts: Ancient Studies, Religious Studies, and Women's,

Gender, and Sexuality Studies. In addition, Thorneloe offers Certificate, Diploma and

Bachelor's Degree programs in Theology through its separate Anglican-focused School of Theology.

33. Thorneloe works with Laurentian's Faculty of Arts to provide courses, electives, minors and majors that dovetail and augment Laurentian's Arts programs for the benefit of all students. All of Thorneloe's programs and courses are approved by Laurentian through the Faculty of Arts Council, and ultimately by the Laurentian Senate.

34. Thorneloe has its own President and small administrative staff to manage the faculty that teach Thorneloe courses and to operate the student residence and parking lot.

Thorneloe currently has 7 full-time faculty members, 12 sessional faculty members, 6 staff and 3 casual staff, for a total workforce of 28. Thorneloe has its own collective agreement with the Laurentian University Faculty Association ("LUFA") for its faculty, as do the other Federated Universities.

35. In addition:

(a) Thorneloe faculty and staff are members of the same pension plan, the Retirement Plan of Laurentian University of Sudbury and its Federated - 10 –

and Affiliated Universities, and have the same pension and benefit arrangements as all other Laurentian faculty and staff;

(b) Thorneloe's pension and group benefits are administered through Laurentian;

(d) in 2019-2020, Thorneloe taught 2,861 Laurentian students, representing 297 full-time equivalents ("FTEs"), 186 of which represent courses supporting other Laurentian programs, and in 2020-2021 Thorneloe taught 2,477 students. The reduction in students was due to Thorneloe's closure of its Motion Picture Arts program, not lack of student interest in its other courses;

(e) Thorneloe's three academic departments are fully integrated with Laurentian's Faculty of Arts;

(f) Thorneloe assists Laurentian in governance and administrative processes;

(g) Thorneloe contributes to the Laurentian University Research Fund;

(h) Thorneloe shares services and utilities with Laurentian including hydro, IT, security and sewage; and

(i) pedestrian and road access to Thorneloe is through the Laurentian campus.

36. Thorneloe is responsibly managed. In 2019-2020, well before Laurentian's CCAA filing, Thorneloe identified that one of its programs (Motion Picture Arts) was under- attended and not profitable. Thorneloe closed down the program and terminated the faculty. - 11 –

37. In addition to tuition fees and government grants for its courses, Thorneloe also generates profit from its popular student residence which has a contemporary design and attracts residents who prefer its peaceful environment.

Laurentian's financial problems

38. Laurentian has been having financial problems for years that are independent of

Thorneloe. The causes of Laurentian's financial problems and current insolvency include:

(a) financial mismanagement by Laurentian, including the improper

commingling of donations, research grants, retiree health benefit funds

and operating funds;

(b) Laurentian continuing to run courses that had low or no student

attendance;

funding reductions by the government of Ontario to Laurentian (and other

universities);

(d) Laurentian's unsuccessful expansion program for a Laurentian campus in

Barrie, Ontario that commenced in 2001 and closed in 2017-2019;

(e) mounting loans that Laurentian incurred to upgrade/modernize its campus

facilities; - 12 –

(f) Laurentian creating a hostile labour environment by breaching collective

agreement(s) with LUFA and generating an abundance of labour

grievances;

(g) losses of revenue to Laurentian from residence, parking, food, and

recreational facilities as a result of the COVID-19 pandemic;4 and

(h) losses incurred on interest rate swaps.

39. Thorneloe is not a cause of Laurentian's financial problems and insolvency.

40. Thorneloe does not "cost" Laurentian money in any material way.

The CCAA DIP loan and milestones

41. As part of its CCAA filing, Laurentian arranged for a $25 million loan from a DIP lender and it negotiated certain DIP terms. The immediate milestone that Laurentian had to meet under the DIP terms was to reach a new collective agreement by May 1, 2021 with LUFA for faculty terminations and program cancellations. The DIP terms are summarized in paragraph 34(b) of the First Report of the Monitor dated February 7,

2021, which is reproduced below. The main condition requires Laurentian to negotiate a new collective agreement with LUFA:

34. The following is a summary of the material terms of the DIP facility, which will be reflected in the DIP Agreement:

b. the maximum principal amount is $25 million with a maturity date of May 1, 2021. The maturity date may be extended for an additional 90

4 See pp. 160 to 165 of the Report of the Proposed Monitor dated January 30, 2021 and the Affidavit of Dr. Hache sworn January 30, 2021 that are filed with the court. - 13 –

days if LU achieves the following milestones, to the satisfaction of the DIP Lender in its sole and unfettered discretion:

i. LU reaches a consensus among all necessary stakeholders on an academic restructuring and reduction of LU's program offerings;

ii. LU enters into a negotiated settlement with LUFA with respect to terminations to be effected, resolution of outstanding grievances, and the terms of a new collective agreement between LUFA and LU; and

iii. LU provides the DIP Lender with a revised cash flow forecast and a multiyear budget demonstrating to the DIP Lender, in its sole and unfettered discretion, that LU is financially sustainable.5 [emphasis added]

42. On April 12, 2021, it was publicly reported that Laurentian had reached a new agreement with LUFA and LUSU and that over 100 professors would be terminated and approximately 60 programs would be cancelled. The new collective agreements were ratified by the unions the next day, on April 13, 2021.

43. The news came as a shock to the Laurentian academic and student community and has been widely reported in the media.6

44. The new collective agreements, faculty terminations and course cancellations should generate significant labour and programming savings for Laurentian, satisfy the

DIP terms, and enable Laurentian to obtain a further advance on its DIP loan.

5 First Report of the Monitor, dated February 7, 2021, at para. 34. 6 See for example: "'An ugly stain for years to come': Laurentian University students, staff reeling from cuts", CBC News (13 April 2021) online: < https://www.cbc.ca/news/canada/sudbury/laurentian- university-job-program-cuts-reaction- 1.5984577#:~:text=The%20emotionally%20charged%20reaction%20to,Sudbury%2C%20Ont.%2C%2 0community.>. - 14 –

Laurentian later moves to close down Thorneloe – for no restructuring purpose

45. As noted, on April 1, 2021, two months after obtaining CCAA protection,

Laurentian sent a Notice of Disclaimer to counsel for Thorneloe to disclaim the two above-noted Agreements.

The CCAA section 32 factors are not met – the Agreements should not be disclaimed a) Subsection 32(4)(b): The prospects of a viable compromise or arrangement will not be enhanced by the disclaimers

46. The disclaimers will not "enhance the prospects of a viable compromise or arrangement being made" in respect of Laurentian, for three main reasons:

47. First, Thorneloe is a small entity and its termination would have no material improvement on Laurentian's financial situation.

48. Thorneloe employs 28 employees, including 7 full-time faculty members, 12 sessional faculty members, 6 administrative staff members and 3 casual staff members

(students and academic support staff) whereas Laurentian employed 1,751 employees as of December 30, 2020.

49. Following Laurentian's CCAA filing and the commencement of the mediation,

Thorneloe retained Farber Financial Group ("Farber"), which has concluded based on its analysis that, even if Thorneloe were to cancel all of its programs and courses and terminate all of its faculty and staff, it would not materially improve Laurentian's financial situation. Farber states: - 15 –

The termination of Thorneloe's federated status would have an immaterial impact on the cost cutting and restructuring of Laurentian as only approx. 1.35% of the net grants and tuition fees earned by Laurentian are paid over to Thorneloe, and that is paid in consideration of valuable academic programming and services provided by Thorneloe to Laurentian students. In fact, we estimate that Laurentian retains approx. 39% of the revenue earned per student enrolled in Thorneloe courses, with only the remaining 61% accruing to Thorneloe.

50. The termination of Thorneloe's federated status will not have any material impact on the financial and administrative restructuring that Laurentian needs to address to reorganize itself. Thorneloe's small size is such that it termination would have no material impact on Laurentian's financial position, as demonstrated in the following chart prepared by Farber:

For the year 2020 Thorneloe (TU) Laurentian (LU) TU as % of LU Notes Grants received $ 568,771 $ 86,420,000 0.66% 1 Tuition Fees $ 1,570,964 $ 50,500,000 3.11% Material Fees $ 65,623 Subtotal $ 2,205,358 $ 136,920,000 1.61% Less : Service Fee $ (358,086) Net Grants and Tuition Fees $ 1,847,272 $ 136,920,000 1.35% Ancillary Revenue $ 381,000 $ 14,000,000 2.72% Salaries and Benefits $ 2,440,000 $ 134,000,000 1.82% Full-time Faculty 7 355 1.97% NOTES: 1. Of the total grants received by LU, $90,601 was received on account of one-time sustainability grants that will not repeat. These include Northern Sustainability Grant of $76,615 and COVID Grant of $13,986. - 16 –

51. Second, Thorneloe is not the cause of Laurentian's financial problems.

52. It is factually and fiscally inaccurate to characterize Thorneloe as a "liability" to

Laurentian or an "impediment" to a successful financial restructuring of Laurentian.

53. The total grants directed to Thorneloe through Laurentian in 2020 in respect of students in academic programs delivered by Thorneloe totaled only $568,771. This represents only 0.66% of the total $86,420,000 in grants that were received by Laurentian in 2020.

54. In addition, the financial impact of any revenue purportedly "lost" by Laurentian to Thorneloe is partially offset by service fees paid by Thorneloe to Laurentian. In 2020,

Thorneloe paid Laurentian a service fee of approximately $358,086, in addition to the grants that are retained by Laurentian.

55. Further, Thorneloe makes other contributions to Laurentian's administration and operations, from which Laurentian derives a financial benefit, including:

(a) Thorneloe has membership on the Faculty of Arts Council, the Laurentian

Senate, the Laurentian Nominating Committee, and the Pension

Committee;

(b) Thorneloe nominates three members to the Laurentian Board of

Governors; - 17 –

Laurentian, supervise graduate students and serve as members of thesis

committees; and

(d) the current director of the Faculty of Arts Master of Arts Program

("HUMA") is a Thorneloe professor.

56. Thorneloe is responsible with its own finances and is well managed. As noted, in

2019, it implemented certain restructuring measures, including the cancelation of two programs and terminating 2 full-time faculty members and 10 sessional faculty members.

As at the date of the CCAA filing, Thorneloe had only 7 full-time faculty members as compared to about 355 full-time faculty at Laurentian, or 1.97% thereof. Salaries and benefits paid by Thorneloe in 2020 totaled $2.44M as compared to $134M paid by

Laurentian during the same period, or 1.82% thereof.

57. As Thorneloe has a historic, statutory, and contractual right to teach, a portion of the global funding from the Province of Ontario is specifically paid in respect of

Thorneloe's courses, not Laurentian courses. It is therefore not accurate to allege that

Laurentian gives up a portion of its own grant funds to Thorneloe. Indeed, as noted above, the main purpose for establishing Laurentian was to federate with Thorneloe,

Huntington and the University of Sudbury, to allow them to receive provincial funding through Laurentian.

58. Thorneloe's tuition fees revenue in 2020 was approximately $1.5M as compared to about $50.5M in tuition fees revenue earned by Laurentian, or 3.11% thereof. Further, - 18 –

ancillary revenue earned by Thorneloe in 2020 was approximately $381,000 as compared to $14M in ancillary revenue earned by Laurentian during the same period, representing

2.72% thereof. Thorneloe's tuition fees revenue is only 3.11% of Laurentian's tuition fee revenue and Thorneloe's ancillary revenue is a mere 2.72% of Laurentian's ancillary revenue during the same period. Thus, even the overall revenues generated by Thorneloe are insignificant as compared to Laurentian's revenues.

59. Third, the DIP agreement terms do not require termination of the Agreements.

60. Disclaimer of the Agreements is not necessary to enable Laurentian to obtain a further advance on its DIP loan, for at least two reasons.

61. First, the DIP terms do not require a termination of the Agreements. The

Federated Universities are not even mentioned in the DIP conditions. The only stakeholder condition is that Laurentian reaches a negotiated settlement with LUFA with respect to terminations to be effected, the resolution of outstanding grievances, and the terms of a new collective agreement with LUFA, which has now been achieved.

62. Second, the fact that the termination of the Agreements with Thorneloe is not a condition of the DIP terms is obvious from Laurentian's conduct. Laurentian delivered its

Notice of Disclaimer to Thorneloe's counsel on April 1, 2021 – two months after it obtained CCAA protection. Thorneloe has brought this application to Court to oppose the proposed disclaimer, which will not be decided with finality (and may be subject to appeals) by the May 1, 2021 date in the DIP terms. Thus, it is obvious that the - 19 –

termination of the Agreements is not a pre-condition for Laurentian to obtain a further advance of the DIP loan. b) Subsection 32(4)(c): The termination of the Agreements with Thorneloe would cause it significant financial hardship and lead to its own insolvency

63. The disclaimer of the Agreements will certainly "cause significant financial hardship" to Thorneloe since a "de-federation" will prevent it from receiving public funding and operating.

64. Thorneloe will suffer catastrophic financial loss and be forced into its own insolvency proceedings under the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3

("BIA") or the CCAA and have to liquidate.

65. As more fully detailed in the chart below, it is estimated that Thorneloe will suffer significant financial losses of $13.7 million or more as a result of termination, comprising the following:

(a) non-recurring termination costs and liabilities of approximately $2.2

million, most significantly those related to employee severance. Pension

liabilities are presently unknown, but represent a significant liability that

may arise upon termination of the Agreements; and

(b) recurring loss of annual revenue and incremental costs that will be

incurred as a result of termination, resulting in an annual loss of income of

approximately $2.5 million. The net present value of the recurring losses

is estimated to be approximately $11.5 million over the next 5 years. - 20 –

Loss based Present Value of on adjusted Future Loss Over Particulars 2019 Next 5 Years Financial (discounted @ Statements 3%)** Notes

Non-Recurring Costs & Liabilities: Pension Liability and PBGF Unknown Unknown 1, 2 Severance Payments 1,423,686 1,423,686 1, 3 Statutory Termination Pay in lieu of Notice 59,663 59,663 1 Professional fees 500,000 500,000 1, 4 Prior Receivables not paid by LU 107,156 107,156 1, 5 Disentanglement costs 100,000 100,000 1, 6 Subtotal of Non-Recurring Costs & Liabilities 2,190,505 2,190,505 (excluding pension liability)

Recurring Costs & Liabilities Loss of Revenue: Grants 568,771 2,604,805 Tuition Fees 1,710,095 7,831,734 Donations and Other Grants 37,783 173,035 Investment Income 183,000 838,086 Residence Fees 215,470 986,790 7 Miscellaneous Income 5,416 24,805 8 Less: LU Service Fee (358,086) (1,639,929)

Incremental annual costs: IT Service Charge 144,179 660,299 9 Subtotal of Recurring Costs & Liabilities 2,506,628 11,479,624

TOTAL (prior to pension liability) 4,697,133 13,670,129 NOTES: ** The calculations presented above are an estimate only and the actual losses sustained by Thorneloe may be higher than the estimates. The net present value future loss over the next 5 years does not include adjustment for anticipated growth in revenues/ increase in costs. (1) These are non-recurring payments/receipts and have not been discounted for net present value calculation. (2) The pension liability is presently unknown but may potentially be a large liability that may arise on the termination of the Federation Agreement. (3) Severance payment has been estimated based on amount payable under common law. (4) Professional service costs are an estimate only and may vary depending on the course of proceedings. (5) Prior receivables owed by LU to TU assumed to be collected and held in trust for TU but to be conservative have been included in this schedule. (6) Disentanglement costs are an estimate of costs in relation to separation of services and other utilities including hydro meters, door security system, fire safety systems and supervision of same. (7) Estimate 50% loss in residence revenue because of the meal plan requirement. Residence revenue is estimated at $7,430 pa per student with a total of 58 available residences of which only 50% are estimated to be occupied. (8) Misc. income comprises of parking and vending machine revenue. Assumed 50% reduction in 2019 parking revenue on account of students not taking TU courses and complete loss of vending machine commission. (9) It is assumed that TU will continue to avail computer services provided by LU and pay its share of the costs. - 21 –

66. The above calculations, showing the net present value impact of termination over the next 5 years, are presented for illustrative purposes only. There is every expectation that Thorneloe would continue to operate with the Laurentian federation in perpetuity, in which case actual losses will exceed the above estimates by many multiples.

67. In addition, the disclaimer of the Agreements and resulting insolvency of

Thorneloe will generate additional financial hardships including those below. It is just and fair for the Agreements to stay in place as the negative outcomes far outweigh any possible minor benefit that may arise for Laurentian:

(a) the cancellation of all courses and programs provided by Thorneloe

(approximately 140 programs and courses teaching approximately 2,132

students), leaving enrolled students without courses and incomplete

degrees and forcing them to locate different courses or transfer to a

different university to complete their degrees;

(b) disenfranchising existing students from completing their chosen programs

and courses, and discouraging future students from selecting Laurentian as

their university of choice;

obligations;

(d) collateral economic damage to outside businesses in Sudbury and

surrounding communities that have commercial relationships with

Thorneloe, directly or indirectly; - 22 –

(e) further detracting from Laurentian's reputation;

(f) a multitude of issues to disentangle Thorneloe from Laurentian that will

likely lead to disputes, litigation and increased costs into the future;

(g) a public dispute that will cause more negative reputational harm that will

further discourage students from selecting Laurentian as their university of

choice; and

(h) further erode access to higher education for individuals in Northern

Ontario.

68. The disclaimer of the Agreements that would cause the closure of Thorneloe operates as an impermissible collateral attack on Thorneloe's collective agreements with its unions contrary to sections 32(9)(b), and is inconsistent with section 33 of the CCAA.

69. Section 32 of the CCAA does not apply to federation agreements in public universities that are established under statute.

70. Sections 11, 18.6, and 32 of the CCAA;

71. An Act to Incorporate Thorneloe University, S.O. 1960-1961, c. 135.

72. An Act to incorporate Laurentian University, S.O. 1960, c. 151.

73. An Act Incorporating Huntington University, S.O. 1960, c. 143.

74. Act to Incorporate Sacred Heart College of Sudbury, S.O. 1914, c. 131. - 23 –

75. An Act respecting Sacred Heart College of Sudbury, S.O. 1957, c. 160.

76. Such further grounds as counsel may advise and this Honourable Court may deem just.

THE FOLLOWING DOCUMENTARY EVIDENCE:

1. The Affidavit of John Gibaut, to be sworn.

2. The Affidavit of Sydney Edmonds, with exhibits, sworn on April 15, 2021;

3. Such further and other material as counsel may advise and this Honourable Court permits.

April 15, 2021 KOSKIE MINSKY LLP 20 Queen Street West, Suite 900, Box 52 Toronto, ON, M5H 3R3

Andrew J. Hatnay - LS#: 31885W [email protected] Tel: 416-595-2083 / Fax: 416-204-2872

Sydney Edmonds - LS#: 79946K [email protected] Tel: (416) 595-2260 / Fax: (416) 204-4936

SUPREME ADVOCACY LLP 340 Gilmour St., Suite 100 Ottawa, ON K2P 0R3

Eugene Meehan, Q.C. - LS#: 29046T [email protected] Tel: (613) 695-8855 / Fax: 613-695-8580

Lawyers for Thorneloe University

TO: SERVICE LIST SCHEDULE "A"

Canadian Affiliated and Federated Universities and University Colleges

1. Carleton University: Dominican University College

2. Laurentian University: Huntington University, University of Sudbury, Thorneloe University, Université de Hearst

3. University of Alberta: St. Joseph's College and St. Stephen's College

4. University of Ottawa: St. Paul University

5. University of Regina: Campion College, First Nations University of Canada, Luther College, Campion College, First Nations University of Canada, Luther College, Athol Murray College of Notre Dame, Briercrest College, Saskatchewan Collaborative Bachelor of Science in Nursing, Saskatchewan Police College

6. University of Saskatchewan: Briercrest College, St. Thomas More College, Horizon College & Seminary, Saskatoon Theological Union, Gabriel Dumont Institute of Native Studies & Applied Research, St. Peter's College

7. University of Toronto: University of St. Michael's College, University of Trinity College, Victoria University

8. University of Waterloo: Conrad Grebel University College, Renison University College, St. Jerome's University, St. Paul's University College

9. Western University: Brescia University College, Huron University College, King's University College IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. Court File No.: CV-21-656040-00CL 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY Applicant

ONTARIO SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST

Proceeding commenced at Toronto

NOTICE OF MOTION

KOSKIE MINSKY LLP 20 Queen Street West, Suite 900, Box 52 Toronto, ON M5H 3R3

Andrew J. Hatnay - LS#: 31885W [email protected] Tel: 416-595-2083 / Fax: 416-204-2872 Sydney Edmonds - LS#: 79946K [email protected] Tel: (416) 595-2260 / Fax: (416) 204-4936

SUPREME ADCOVACY LLP

4924267_1.docx Eugene Meehan, Q.C. - LS#: 29046T [email protected] Tel: (613) 695-8855 / Fax: 613-695-8580

Lawyers for Thorneloe University

TAB 2 Court File No.: CV-21-656040-00CL

ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST)

IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, C. c-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY

AFFIDAVIT OF SYDNEY EDMONDS (sworn April 15, 2021)

I, SYDNEY EDMONDS, of the City of Toronto, in the Province of Ontario, MAKE OATH AND SAY:

I am a lawyer with the law firm Koskie Minsky LLP, lawyers for Thorneloe University ("Thorneloe") in these proceedings.

Attached hereto and marked as Exhibit "A" is a copy of the federation agreement between Laurentian University of Sudbury ("Laurentian") and Thorneloe, dated 1962 (the "Federation Agreement").

Attached hereto and marked as Exhibit "B" is a copy of the Laurentian University and Federated Institutions Proposed Grant Distribution and Service Fees, dated November 10, 1993.

Attached hereto and marked as Exhibit "C" is a copy of the Laurentian University Financial Distribution to Federated Universities, between Laurentian and Thorneloe, effective as of May 1, 2019 (the "Financial Distribution Notice").

Attached hereto and marked as Exhibit "D" is a copy of the Notice of Laurentian University of Sudbury to Disclaim or Resiliate an Agreement, dated April 1, 2021.

4918587_1.docx - 2 -

Attached hereto and marked as Exhibit "E" is a copy of a letter from Andrew J. Hatnay (Koskie Minsky LLP) to D.J. Miller (Thornton Grout Finnigan LLP) dated April 2, 2021 objecting to the Notice of Disclaimer of Laurentian.

Attached hereto and marked as Exhibit "F" is a copy of a web article entitled Our Campus in the 1960s regarding the history of Laurentian.

Attached hereto and marked as Exhibit "G" is a copy of a news article by the Sudbury Star entitled How to fix Laurentian University without gutting it dated April 14, 2021.

Attached hereto and marked as Exhibit "H" is a copy of a news article by CBC News entitled 'An ugly stain for years to come': Laurentian University students, staff reeling from cuts dated April 13, 2021.

Attached hereto and marked as Exhibit "I" is a copy of a news article by the Sudbury Star entitled Growing anger, bitterness over Laurentian cuts dated April 14, 2021.

Attached hereto and marked as Exhibit "J" is a copy of a news article by the Sudbury Star entitled Laurentian cuts could take more than $100 million out of Sudbury's economy dated April 14, 2021.

I swear this Affidavit in good faith and in support of a motion for an order that the Federation Agreement and the Financial Distribution Notice are not to be disclaimed or resiliated, and for no other or improper purpose.

4918587_1.docx - 3 -

SWORN REMOTELY by Sydney Edmonds of the City of Toronto, in the Province of Ontario, before me at the Municipality of Clarington, in the Regional SYDNEY EDMONDS Municipality of Durham, on April 15, 2021, in accordance with O. Reg. 431/20, Administering Oath or Declaration Remotely.

A Commissioner for Taking Affidavits, etc. Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

 Okay as is. Please proceed By signing this proof, I recognize that any mistake(s)  Please make changes and proceed and/or error(s) not identified on this proof is/are my responsibility and not that of the Dealer/Manufacturer  Please make changes and send another proof and that what I see here is what will be produced. OrderNo: 01674600-001 4918587_1.docx Product: 1 x 31 - Default - Wooden Status: Entered This is Exhibit "A”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

 Okay as is. Please proceed By signing this proof, I recognize that any mistake(s)  Please make changes and proceed and/or error(s) not identified on this proof is/are my responsibility and not that of the Dealer/Manufacturer  Please make changes and send another proof and that what I see here is what will be produced. OrderNo: 01674600-001 Product: 1 x 31 - Default - Wooden Status: Entered 438 439 440 441 442 443 This is Exhibit "B”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit "C”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC. Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit “D”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit “E”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

 Okay as is. Please proceed By signing this proof, I recognize that any mistake(s)  Please make changes and proceed and/or error(s) not identified on this proof is/are my responsibility and not that of the Dealer/Manufacturer  Please make changes and send another proof and that what I see here is what will be produced. OrderNo: 01674600-001 Product: 1 x 31 - Default - Wooden Status: Entered April 2, 2021 Andrew J. Hatnay Direct Dial: 416-595-2083 Direct Fax: 416-204-2872 VIA EMAIL [email protected]

D.J. Miller Suite 3200, TD West Tower 100 Wellington Street West P.O. Box 329, Toronto-Dominion Centre Toronto, Ontario M5K 1K7

Dear Ms. Miller:

Re: Laurentian University CCAA – Thorneloe University

Federation Agreement between Laurentian and Thorneloe University dated 1962

Financial Distribution Notice between Laurentian and Thorneloe University dated May 1, 2019 amending the Proposed Grant Distribution and Service Fees agreement between Laurentian, the University of Sudbury, Thorneloe University, and Huntington University dated November 10, 1993.

We acknowledge receipt of your client's Notice of Disclaimer under section 32(1) of the CCAA dated April 1, 2021. Please be advised that Thorneloe University objects to the Disclaimer and intends to apply to court under section 32(2) of the CCAA for an order that the above-noted agreements not be disclaimed.

We will contact you to discuss a litigation schedule for the court application.

Please also be advised that we reserve the right to cross-examine all affiants of affidavits that are filed, as well as to cross-examine the Monitor on any report.

Yours truly,

KOSKIE MINSKY LLP

Andrew J. Hatnay AJH:vdl

4906169_1.DOCX Page 2

c. Client Sharon Hamilton, Ernst & Young Inc. Ashley Taylor, Stikeman LLP Eugene Meehan, Q.C., Supreme Advocacy LLP Demetrios Yiokaris, Sydney Edmonds, Koskie Minsky LLP

4906169_1.DOCX This is Exhibit "F”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit "G”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit "H”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit "I”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

This is Exhibit "J”

referred to in the Affidavit of Sydney Edmonds

sworn before me this 15th day of April, 2021.

A COMMISSIONER FOR TAKING AFFIDAVITS, ETC.

Michelle Nicole Alexander, a Commissioner, etc., Province of Ontario, for Koskie Minsky LLP, Barristers and Solicitors. Expires August 28, 2023

OrderNo: 07516882-001 Product: 1 x ODN40 - Black - X-Stamper Status: Proof/Embargo

Every effort has been made to ensure that all specifications and requests have been followed. This document was created at 100% unless otherwise indicated. box is 1" lines are 1/8" PROOFSignature

» IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. Court File No.: CV-21-656040-00CL 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY Applicant

ONTARIO SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST

Proceeding commenced at Toronto

AFFIDAVIT OF SYDNEY EDMONDS

KOSKIE MINSKY LLP 900-20 Queen Street West, Toronto, ON M5H 3R3 Andrew J. Hatnay LS#: 31885W [email protected] Tel: 416-595-2083 / Fax: 416-204-2872 Sydney Edmonds - LS#: 79946K [email protected] Tel: (416) 595-2260 / Fax: (416) 204-4936

SUPREME ADVOCACY LLP 100-340 Gilmour St., Ottawa, ON K2P 0R3 Eugene Meehan, Q.C. - LS#: 29046T [email protected] Tel: (613) 695-8855 / Fax: 613-695-8580

Lawyers for Thorneloe University

4918587_1.docx » IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. Court File No.: CV-21-656040-00CL 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF LAURENTIAN UNIVERSITY OF SUDBURY Applicant

ONTARIO SUPERIOR COURT OF JUSTICE - COMMERCIAL LIST

Proceeding commenced at Toronto

MOTION RECORD

SUPREME ADVOCACY LLP 100-340 Gilmour St., Ottawa, ON K2P 0R3 Eugene Meehan, Q.C. - LS#: 29046T [email protected] Tel: (613) 695-8855 / Fax: 613-695-8580

Lawyers for Thorneloe University

4923252_1.docx