By: E&P Staff
AbitibiBowater, North Americas’ largest newsprint producer, has announced that it received approval for its plan of reorganization from unsecured creditors under the Companies’ Creditors Arrangement Act (CCAA) in Canada.
The green light for the Canadian side of the company’s bankruptcy reorganization did not include Bowater Canada Finance Corp. (BCFC), a special-purpose subsidiary with no operating assets. AbitibiBowater said in a statement that it “does not believe that the exclusion of BCFC will affect the timing of the Company’s sanction hearing by the Canadian Court nor does the Company expect it will materially delay AbitibiBowater’s emergence from creditor protection slated for this fall.”
The sanction hearing under the CCAA process is scheduled for Sept. 20, in Quebec Superior Court.
Also on Sept. 20, votes on the U.S. Chapter 11 reorganization plan are to be tabulated. That plan’s confirmation hearing will be held in Delaware four days later, when, according to a Bloomberg report, the bankruptcy judge also will hold a hearing to decide if a Chapter 11 trustee should be appointed for BCFC.
If the Chapter 11 reorganization plan is not approved, Abitibi has until Oct. 16 to propose a reorganization. That extension of exclusivity was granted Sept. 14, when the judge also approved a $130 million (Canadian) settlement with the government of Canada over provincial cancellation of water and timber rights after the company closed a Newfoundland plant (E&P Online, Aug. 27).
In the matter of the BCFC, Bloomberg reported that BCFC noteholders Aurelius Capital Management LP (among the biggest holders of Tribune Co. bonds, see E&P Online, Sept. 15), and Contrarian Capital Management LLC have argued that the subsidiary has a contribution claim against Bowater under a provision of the Nova Scotia Companies Act, and that the companies’ managers should have ascribed greater value to the contribution claim, thereby enhancing recoveries by BCFC’s creditors.