A claim filed by Quebecor World (USA)'s litigation trustee for alleged preferential transfers of approximately $18.8 million to Catalyst Paper, Richmond, B.C., Canada, is not expected to result in any significant liability to Catalyst, the paper company reported this past week. The claim seeks the return of payments made by Quebecor World to Catalyst in the ordinary course of their trade relationship in the 90 days prior to Quebecor World's Chapter 11 bankruptcy filing in December 2007.
Catalyst is one of 1,700 vendors of Quebecor World who received payments totaling $390 million during the preference period in which the litigation trustee has sought recovery. The claim is made pursuant to the U.S. Bankruptcy Code which allows recovery of certain transfer made by the bankrupt debtor within the 90 days prior to the bankruptcy filing, subject to a vendor's defenses.
Catalyst says that it intends to defend the claim and has been advised that it has a number of defenses available that are expected to eliminate or significantly reduce its financial exposure. Accordingly, Catalyst added, it does not expect to incur any significant liability in connection with the claim.
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