White Birch Declares Bankruptcy

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White Birch Paper Co., Greenwich, Conn., USA, the second largest newsprint manufacturer in North America, and its subsidiaries, this week announced that they have sought creditor protection in Canada under the Companies' Creditors Arrangement Act to preserve and maximize the value of the business and improve their capital structure. The company's U.S. subsidiary, Bear Island Paper Co., also filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Eastern District of Virginia. The company intends to continue working with its lenders toward a financial restructuring as expeditiously as possible.

White Birch expects operations to continue as usual and says that it remains focused on serving its customers during and after the restructuring process. "This process is about fixing our capital structure," said Christopher Brant, president. "We remain committed to delivering the highest quality product to our many valued customers, and through this financial restructuring, we believe we will be better positioned to continue to do so well into the future."

The company is seeking approval in Canada and the U.S. of a $140 million in debtor-in-possession (DIP) financing with certain of its lenders, which is expected to provide more than adequate liquidity during the restructuring. In conjunction with this week's filings, the company requested customary relief to support its customers and employees during the process. As part of this relief, the company asked the Court for permission to continue employee and customer programs without interruption. The company says it remains in ongoing, productive dialogue with its creditors and other stakeholders regarding the terms of the restructuring.

White Birch Paper, a privately owned, family-run business, operates four pulp and paper mills (three in Canada and one in the U.S.) with a total production capacity of more than 1.3 million metric tons of newsprint and directory paper. Its mills are: Bear Island (Ashland, Va., USA); F.F. Soucy (Rivière-du-Loup, Qué., Canada); Papier Masson (Gatineau, Qué., Canada.) and Stadacona (Québec City, Qué., Canada).