By: Jim Rosenberg Lawsuit Alleges Pacifica Sale To Norske Skog Canada Is Flawed
Pacifica Papers' largest shareholder is suing the newsprint maker
to halt distribution of information to shareholders on the
company's pending sale to Norske Skog Canada until a "flawed sale
process" is corrected. Shareholders are to vote May 31.
(E&P, April 2, p. 24.)
Controlling almost 19% of Pacifica, Cerberus Capital Management
alleges that Pacifica Chairman J. Trevor Johnstone offered CEO
Wayne Nystrom a "financial inducement" to back the deal with
Norske Skog, which he opposed. Pacifica denied the allegation.
Cerberus further complained of conflict of interest in another
Pacifica director's work for a bank that stands to collect
advisory fees if Norske Skog buys Pacifica. Pacifica denied the
director acted improperly.
In a related suit, Cerberus said Johnstone prevented Pacifica
directors "from considering a potential rival bid from St. Marys
Paper Ltd.," the National Post in Toronto reported, adding
that Pacifica's lawyer told the court that Nystrom owns half of a
firm that controls 26% of St. Marys.
Jim Rosenberg (tech@editorandpublisher.com)
is a senior editor covering newspaper technology for E&P.
Copyright 2001, Editor & Publisher.
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