WHAT?

WHAT!?!

Oh sweet baby Jesus.

1/ I've had a look at the filings now. If I'm reading the Ernst & Young cash flow statements correctly, Laurentian has $13 million on hand, and that this will dwindle progressively to zero over the next five weeks.

2/ There's a very strong case in the court documents that the university is in long-term trouble and needs to restructure its academic offerings and its relationship with the federated universities. But neither of these is plausibly an immediate cause of the crisis.

3/ It's also evident that there have been some absolutely terrible cash management processes in place at Laurentian. But again, it's not clear how this is a proximate cause of the crisis. Bad book-keeping, on its own, does not cause a cash shortage.

4/ Let me stress that I am not a financial analyst, and so take this interpretation with a big grain of salt. But my strong impression from reading this is that Laurentian never took out a secured loan to cover those years and years of $2-5M deficits

5/ If you look at the $90M or so of debt recorded in the filings, it's almost all for capital projects. Almost no borrowings to cover general operating expenses. So how were they financing those annual deficits? I'm starting to think they were doing it through cash management.

6/ Again, huge disclaimer, I'm not a finance guy, but my impression is that they kept the whole thing going by taking current year earnings to pay off liabilities from the previous year. And because of bad cash management process, current year earnings included restricted funds.

7/ Let me stress that I would be overjoyed to correct the record if I am wrong and someone can provide an alternate explanation. But I can't come up with an such an explanation on my own right now.

8/ Jesus, what a mess, though. fin.

9/ Actually, wait, not fin. KPMG has been Laurentian's auditor for at a decade, at least, maybe longer. HOW DID THEY NOT NOTICE?

10/ If y'all really want to go through the gory details, they are available here: https://documentcentre.ey.com/#/detail-engmt?eid=459. The "Report of the Proposed Monitor" is the best place to start.

11/ Just going back to this passage again. This whole affair comes down to: 1) when did this "co-mingling" start? 2) whose idea was it? and 3) was it done specifically to cover operating deficits without recourse to external borrowing?