Quest University’s biggest lender has dropped a lawsuit that it filed against the school.
Vanchorverve Foundation filed a notice of discontinuance for its civil action on March 27. The foundation had previously initiated a lawsuit against the school on Feb. 13.
In the suit, the foundation alleged it was owed $23.4 million.
However, that lawsuit was started shortly after the school received financial protection under the Companies' Creditors Arrangement Act, or CCAA.
This made it unclear as to whether any legal proceedings could go forward, as CCAA protection generally acts as a shield against litigation.
Quest and its lawyers said that neither they nor its CCAA monitor had given consent to the Vanchorverve lawsuit. A spokesperson for the school said that it was a violation of the stay of proceedings.
Previously, Quest was granted CCAA protection by the Supreme Court of British Columbia in January. This protection will be in place until May 29.
The school sought CCAA proceedings after Vanchorvere called in a debt of $23.4 million in November 2019.
Prior to the judge granting the school protection, Vanchorverve had demanded that it be able to install four people of its choosing into the university’s board of governors. It also wanted Quest to take a loan from a creditor of its choosing.
The CCAA motion has given the school a temporary reprieve from going into receivership or bankruptcy, and it’s expected the university has been using the time to financially restructure itself.
