Catalyst Creditors Approve Restructuring Plan
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Catalyst Paper Corp., Richmond, B.C., Canada, has received the necessary creditor approval for its second amended plan of arrangement under the Companies Creditors Arrangement Act (CCAA) in Canada. Approval of more than 99% of secured and unsecured creditors was received in votes cast in person and by proxy at meetings held this week in Richmond.
The sanction hearing under the CCAA process is scheduled to occur today (June 28) in the Supreme Court of British Columbia and pending the B.C. Court approval, the confirmation hearing under the Chapter 15 process of the U.S. Court in Delaware is expected to take place in mid-July.
"We have received support from a majority of stakeholders since we began the reorganization process and today's vote of support by creditors for the second amended plan of arrangement sets out a clear path forward," said President and CEO Kevin J. Clarke. "With the cooperation of employees, vendors, customers, pensioners, and investors, Catalyst has been able to make progress through a very complicated situation at an unprecedented swift pace.
"The plan that received creditor approval today puts Catalyst on a stronger financial base to compete and adapt as the marketplace for our products continues to change," Clarke continued. "We're now turning our attention to securing our exit financing and satisfying the remaining conditions of the plan with a target timeline to emerge from creditor protection in the near term."
In a related proceeding, Catalyst received B.C. Court approval to extend the period of CCAA protection to this coming September 30.
Catalyst also received confirmation of regulatory approval by provincial government Order in Council of its proposed modifications to its salaried pension plan to provide for a special portability election option and solvency funding relief. The amendments required provincial government approval. The company estimates that it will save some $7 million annually with implementation of these modifications following a successful plan of arrangement.
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