AB IN NEWS AGAIN
AbitibiBowater is in the news again, but this time it’s not solely for its financial woes. The struggling forest products company is now facing a controversy over the environmental cleanup at five sites, including a defunct Grand Falls-Windsor, Nfld. paper mill that the government expropriated in December 2008.
According to a Canadian Press article, Newfoundland premier Danny Williams has conceded the province would likely have to clean up the mess left by the Montreal-based company. The province wants to know if a debtor’s statutory duty to remove environmental contamination is “extinguished” under the Companies’ Creditors Arrangement Act (CCAA) like a commercial debt, it said in a notice of application to have the issue heard by the country’s top court. The move came after the Quebec Court of Appeal refused to hear the case.
Newfoundland and Labrador has said there are three specific issues around the case, including: ensuring consistency across the country by resolving a conflict between provincial environmental law and federal bankruptcy and insolvency law; determination of who should bear the cleanup costs when a company is attempting to restructure; and answering the question of whether the CCAA gives a court the power to remove all hurdles under provincial law that impair a company’s ability to restructure.
Canadian Press said AbitibiBowater has refused to comment on the province’s legal moves. On September 14, the company’s creditors are scheduled to vote on a restructuring plan that could see AbitibiBowater exit court protection by mid-October. They have been under creditor protection since April 2009 and 6,000 employees have been laid off.
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