Creditors Decline to Support Fraser Papers' Restructuring Plan
Jan. 10, 2010 (Press Release) - Fraser Papers Inc. and its subsidiaries ("Fraser Papers" or the "Company") announced today that a meeting of creditors (the "Meeting") was held in Toronto. The Meeting was to vote on the consolidated plan of compromise or arrangement (the "Plan") filed with the Ontario Court overseeing its restructuring proceedings under the Companies' Creditors Arrangement Act ("CCAA").
Despite the support of PricewaterhouseCoopers, the court-appointed Monitor, the Company did not receive the sufficient support from creditors at the Meeting. As a result, the Company will not be implementing the Plan.
Under criteria set out in the CCAA, the Plan required approval of the majority of creditors in number and 66 2/3% by dollar value of claims filed by creditors. The Company reported that 98.4% of creditors voted in favour of the Plan. However only 41.7% of claims based on dollar value supported the Plan, which is below the required level for Plan Approval.
During the meeting, the Monitor indicated that implementation of the Plan was expected to result in estimated recoveries of approximately 19%-20%, on an undiscounted basis.
"We worked with our stakeholders in an effort to solicit support for the Plan, which provides better value to creditors than any of the alternatives available to the Company," said Glen McMillan, Chief Restructuring Officer of the Company. "Unfortunately, there are a small number of large creditors who have decided to vote against the Plan to the detriment of the majority of creditors who would have preferred to see this Plan move forward".
Subject to the availability of funding, the Company will continue to realize upon its remaining assets for the benefit of all stakeholders and will consider all options in connection with its current CCAA proceedings or any other proceedings.
SOURCE: Fraser Papers Inc.