Newfoundland won’t pursue legal action against AbitibiBowater
January 5, 2010 By Pulp & Paper Canada
Newfoundland’s Justice Minister Felix Collins told the province’s members of parliament that the p…
Newfoundland’s Justice Minister Felix Collins told the province’s members of parliament that the province has backed away from court action against AbitbibiBowater, the Telegram newspaper reported in early December.
According to the newspaper, Premier Danny Williams said it is not worth the effort to proceed with the court case. The province was looking to recoup what it has paid as severance to laid-off workers after AbibitiBowater shuttered its mill in Grand Falls-Windsor in the spring of 2009. Williams says that money – which could exceed $40 million – would be considered an unsecured debt, and would be a low priority among creditors if the forest products company goes bankrupt.
But Williams also said there’s a “real possibility” the province won’t have to pay AbitibiBowater for expropriating its brick and mortar assets either, the Telegram reports. When the province expropriated those assets it said it would fairly compensate the company, but Williams told reporters the severance payments and the company’s environmental liabilities would be subtracted from the fair market value of those assets.
“If the assets don’t exceed the liabilities, then there would be no cash payment coming from the government,” Williams said. “Our assessment, at this particular point in time, is that there would not be a net payment to AbitibiBowater.”
Print this page