Troubled Canadian forest product firm AbitibiBowater has had its reorganisation plan approved by Quebec’s Superior Court.
The company has already had its plan signed off by creditors under the CCAA in Canada and Chapter 11 of the US Bankruptcy Code in the US.
David Paterson, the company’s president and CEO, said the court approval was a “major milestone” in restructuring the business.
A hearing under the Chapter 11 process was due to take place yesterday (September 24) in the US Bankruptcy Court in Delaware.
AbitibiBowater is entering into debtor commitments of about US$300m, as well as an amendment providing for the continuation of an existing securitisation programme for its accounts, amounting to US$250m.
The arrangements are expected to allow the firm to continue business as normal.
Mr Paterson said the company had been adversely affected by industry pressures and the inability to raise new capital, and without court protection the business would not have been able to continue.
“If history serves as a guide, it is worth noting that one of our predecessor companies – Abitibi – filed for bankruptcy during the Great Depression. The company re-emerged and prospered over the many following decades.”
