Court Rules Catalyst Restructuring Can Proceed

Struggling Catalyst Paper Corp. has received the go-ahead from a court in British Columbia to begin a planned restructuring, while at the same time filing for protection from creditors in the United States, The Globe and Mail reported. The Richmond, B.C.,-based company said Wednesday a B.C. court had issued an initial order under the Canada Business Corporations Act to begin the restructuring process. The plan would see bondholders take control of the firm. It would also reduce its overall debt by $315.4-million and cut annual cash interest payments by $25.5-million. The filing Wednesday in a Delaware court was made under provisions of Chapter 15, a form of filing that foreign companies operating in the U.S. employ when seeking protection from creditors. But Catalyst emphasized that the Canadian court order is not a bankruptcy proceeding. “While this whole process of restructuring continues we will be running the business as usual and satisfying all of our obligations to our suppliers, customers, employees and retirees just as we ordinarily would,” said Catalyst spokeswoman Lyn Brown. Shares in Catalyst fell from 2 cents each to a penny Wednesday on the Toronto Stock Exchange. The B.C.-based producer of specialty papers, newsprint and pulp operates four mills in British Columbia and Arizona. Catalyst said the debt restructuring will give the company more financial flexibility to deal with a slumping pulp, paper and newsprint market. Read more.