AbitibiBowater Files Framework for Plan of Reorganization
MONTREAL—May 4, 2010—AbitibiBowater Inc. today announced that it and certain of its U.S. and Canadian subsidiaries, currently under creditor protection, have filed with courts in Canada and the United States a Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code and CCAA Plan of Reorganization and Compromise in draft form (together, the "Plan"). These filed documents are available on the company website, www.abitibibowater.com.
The plan is a framework for the final forms expected to be filed in the near term and is not being filed for the purpose of soliciting votes and remains subject to finalization. The company intends to file with the courts an amended plan containing more detailed economic terms, along with disclosure documents and proxy materials providing information on the plan and voting procedures.
A classification scheme and resultant forms of recoveries for all company creditors is proposed in the plan. It specifies that non-disputed pre-petition secured, administrative, debtor-in-possession and other priority claims would be paid in full in cash, or satisfied as otherwise agreed, at emergence. Unsecured claims would receive a pro rata share of equity in the reorganized company upon emergence, subject to certain conditions. Details on the extent of recovery for unsecured creditors will be outlined in forthcoming disclosures. The Plan also provides that the Company's current common stock will be cancelled and holders will receive no recoveries.
"The filing of these documents is an important step in AbitibiBowater's creditor protection proceedings and a precursor to a key milestone we intend to reach in the near future with the filing of the plan's disclosure documents and proxy materials," stated David J. Paterson, President and CEO. "While we recognize the consequences this Plan outlines for our current common stockholders, this result was necessary in order to meet our overall obligations to creditors and effectively restructure for the future."