Newsprint Maker White Birch Paper Files for Creditor Protection in Canada, U.S.
Feb. 24, 2010 (Press Release) - White Birch Paper Company ("White Birch" or the "Company") and its subsidiaries today announced that they 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 Company, also filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Eastern District of Virginia.
The Company intends to continue to work with its lenders toward a financial restructuring as expeditiously as possible.
White Birch expects operations to continue as usual and 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 filing today is an important step toward ensuring White Birch’s future as a strong competitor with a healthy balance sheet.”
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 today’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 remains in ongoing, productive dialogue with its creditors and other stakeholders regarding the terms of the restructuring.
White Birch is seeking to retain Kirkland & Ellis as legal counsel in the U.S., Stikeman Elliott as legal counsel in Canada, Lazard as financial advisor, Ernst & Young Inc. as Canadian monitor and AlixPartners as restructuring advisor.
The filing comes at the culmination of a year of detrimental economic conditions which negatively impacted the Company. Significant factors include a decline in demand for newsprint, combined with a decline in prices, as well as the increased strength of the Canadian dollar.
White Birch Paper Company is the second largest newsprint manufacturer in North America with operations in both Canada and the United States.
SOURCE: White Birch Paper Company