Richmond, British Columbia, Canada, 22 January 2010 – Catalyst Paper (TSX:CTL) today announced that a claim filed against it by Quebecor World (USA)’s litigation trustee for alleged preferential transfers of approximately USD 18.8 million is not expected to result in any significant liability to Catalyst. 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 before Quebecor World’s Chapter 11 filing in December 2007.

Catalyst is one of 1700 vendors of Quebecor World who received payments totalling USD 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 before the bankruptcy filing, subject to a vendor’s defences.

Catalyst intends to defend the claim and has been advised that it has a number of defences available that are expected to eliminate or significantly reduce its financial exposure. Accordingly, Catalyst does not expect to incur any significant liability in connection with the Quebecor World claim.

Catalyst Paper manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers, and commercial printers in North America, Latin America, the Pacific Rim, and Europe. With six mills located in British Columbia, Canada, and Arizona, USA, Catalyst has a combined annual production capacity of 2.5 million metric tons. The company is headquartered in Richmond, British Columbia, Canada, and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Index and is also ranked by Corporate Knights as one of the 50 Best Corporate Citizens in Canada.