Court dismisses claim by former Ligni Bel sawmill of Scotsburn, Nova Scotia, that it was owed C$33.3M after entry of NewPage Port Hawkesbury paper mill into creditor protection in 2011
April 25, 2013
(Industry Intelligence Inc.)
– The Supreme Court of Nova Scotia has dismissed a claim from the former Ligni Bel sawmill that it was owed C$33.3 million following NewPage Port Hawkesbury paper mill's entry into creditor protection in 2011, according to a report by the Cape Breton Post.
Scotsburn-based Ligni Bel claimed that the amount owed was due to problems including increased log costs and a failure by NewPage to supply enough wood. As a result, the sawmill operator said it had to reduce daily operations and sell its wood chips elsewhere, which put the operation at a financial disadvantage.
NewPage argued that it took “extraordinary” measures to deliver timber to Ligni Bel's sawmill, and claimed that the company had fallen behind with its payment under the terms of a fiber agreement between the two companies, the Cape Breton Post reported.
In an adjudication by a claims officer released on April 24, Ligni Bel’s claim was rejected on grounds that NewPage provided significant detail of its efforts to accommodate the sawmill operator. The ruling also found that there was no evidence that NewPage tried to avoid its responsibilities to Ligni Bel or other creditors when it was caught up in a financial crisis beyond its control.
Ligni Bel shut down operations in November 2011 and was acquired by an affiliate of Northern Resources Nova Scotia Corp., according to a statement issued by Northern Pulp Nova Scotia Corp. on Oct. 3, 2012, according to media reports at the time. Northern Resources, established in 2010, is the parent of Northern Pulp Nova Scotia Corp. and Northern Timber Nova Scotia Corp., the statement said. Northern Resources is a subsidiary of Paper Excellence Canada Holdings Corp. of Richmond, British Columbia.
The NewPage mill reopened in October 2012 under the new name of Port Hawkesbury Paper, after Pacific West Commercial Corp. bought it for $33 million, the Cape Breton Post reported.
The primary sources of this article are the Cape Breton Post, Cape Breton, Nova Scotia, on April 24, 2013, and a statement issued by Northern Resources Nova Scotia Corporation, Pictou, Nova Scotia, on Oct. 3, 2012.