Skip to content

Court approves request to scrap closed mill

Creditors to vote on restructuring plan next month

Catalyst Paper Corporation has received court approval to scrap some of the equipment at its Elk Falls mill in Campbell River.

BC Supreme Court approved the company’s request to permit the sale of equipment and steel on Wednesday, March 21.

The Elk Falls mill was permanently closed in 2010. The company filed an affidavit with the court on March 16 asking for approval after a year-long attempt to auction all major pieces of equipment failed.

Catalyst has been under Companies’ Creditors Arrangement Act (CCAA) creditor protection since late January.

A creditor vote on a restructuring plan the company has proposed will be held on April 23.

If the restructuring plan is not approved by creditors, Catalyst has asked for court approval to sell its remaining mills.

The company and the 2016 noteholders have put forward a sales and investor solicitation process, which includes a “stalking horse bid.” This means the 2016 noteholders are prepared to bid to become the new owners of the company.

A stalking horse bid is an initial bid on a bankrupt company’s assets from an interested buyer chosen by the bankrupt company. This method allows the distressed company to avoid low bids on its assets. Once the stalking horse has made its bid, other potential buyers may submit competing bids.