AbitibiBowater Files Framework for Plan of Reorganization

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AbitibiBowater Inc., Montreal. Que., Canada, reports that the company and certain of its U.S. and Canadian subsidiaries, currently under creditor protection, this week filed with courts in Canada and the U.S. a Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and CCAA Plan of Reorganization and Compromise in draft form. The plan is a framework for the final forms expected to be filed in the near term.

A classification scheme and resultant forms of recoveries for all company creditors is proposed in the plan. It specifies that non-disputed pre-petition secured, administrative, debtor-in-possession, and other priority claims would be paid in full in cash, or satisfied as otherwise agreed, at emergence. Unsecured claims would receive a pro rata share of equity in the reorganized company upon emergence, subject to certain conditions. Details on the extent of recovery for unsecured creditors will be outlined in subsequent disclosures.

Before emerging from creditor protection, the company must secure adequate exit financing and complete efforts to address labor costs and pension issues, as well as satisfy other conditions set forth in the plan. Prior to emergence, a new board of directors will also be designated for the company. The plan will ultimately require approval by the creditors and the courts.