It is possible that NOSM University (Northern Ontario School of Medicine) will recover the $14.6 million plus interest that is locked into the Companies’ Creditors Arrangement Act (CCAA) when Laurentian University became involved in financial insolvency in February 2021.
In November 2021, NOSM president and CEO Dr. Sarita Verma expressed her concern at a public meeting about the loss of funds that had first been endowed to the medical school when it was part of Laurentian.
It was revealed at that time that $14 to $15 million worth of endowments were directed to LU before the financial insolvency occurred. The endowments were meant for the most part to be applied toward scholarships and bursaries at the medical school.
The proposal put before the Ontario Superior Court of Justice in the past week outlines that Laurentian University (the applicant) will transfer those funds back to NOSM University. The plan of arrangement states "the Applicant will transfer to NOSM University, or as NOSM University may direct, that portion of Laurentian’s investment account equal to the aggregate amount of the NOSM Endowment Funds. The Monitor notes that as of April 30, 2022, this amount was estimated to be approximately $14.6 million.”
The court document also states there will be interest added to the payout.
"The actual amount to be transferred will be adjusted to reflect additional interest income and investment gains and/or losses, based upon the most recent monthly information available as at the Plan Implementation Date."
In June 2021, the Northern Ontario School of Medicine (NOSM) became the first stand-alone medical university in Canada.
According to NOSM, the medical school was "established as a government strategy to address the health needs of the region, improve access to quality care, and contribute to the economic development of Northern Ontario. It was born of a grassroots movement, from communities across Northern Ontario advocating for a solution to regional health inequalities."
The payout proposal is just that, at this time, a proposal. The court document states that the creditors on record with CCAA will be asked to approve the plan of arrangement by a vote. The vote is expected to be held on Sept. 14, 2022.
NOSM declined any comment on this latest development because the matter is still before the court.
"Due to the Laurentian CCAA proceedings, NOSM University is unable to comment," said an email statement from the medical school.
Len Gillis covers health care and mining for Village Media's Sudbury.com.
