White Birch Paper Company
Greenwich, Connecticut, USA 24 February 2010 -- (BUSINESS WIRE) -- White Birch Paper 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.
The company is seeking approval in Canada and the United States of a USD 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 United States, 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 that negatively affected the company. Significant factors included a decline in demand for newsprint, combined with a decline in prices, and the increased strength of the Canadian dollar.
Information about the White Birch restructuring is available at www.whitebirchpaper.com.
White Birch Paper Company is the second largest newsprint manufacturer in North America; it has operations in Canada and the United States.