MONTREAL—AbitibiBowater’s restructuring plan has won the required support from a majority of its U.S. creditors.
As was the case last week with votes in Canada, creditors of Bowater Canada Finance Corp. failed to approve the plan.
Aurelius Capital Management and Contrarian Capital Management opposed the plan as noteholders of the special purpose company subsidiary that has no operating assets.
BCFC will be excluded from the Chapter 11 restructuring in the U.S., as it was with the plan under the Companies’ Creditors Arrangement Act in Canada.
A Quebec Superior Court began a hearing Monday to confirm the restructuring plan while a U.S. Bankruptcy Court in Delaware will conduct its own hearing on Friday.
AbitibiBowater CEO David Paterson said the newsprint giant is pleased to have received the approval “by the vast majority of creditors” for its restructuring plan.
“We appreciate the support for our plans of re-organization as we work to create a more sustainable and competitive organization,” he stated.
Approval from the two courts is required before the Montreal-based forestry company can complete its restructuring.
Objections from Aurelius Capital and Contrarian could delay, or even threaten, the ability of U.S. debtors to win court confirmation of the plan, the court-appointed monitor said in a report.
Details of the U.S. votes weren’t immediately available.
However, more than 97 percent of the 5,793 creditors voting in 20 creditor classes in Canada supported the plan, holding $8.3 billion of the value of claims.
They will receive a percentage of their claims that will vary by class.
Payment either will be in cash or in shares of the newly-structured company.
Bowater Canada Finance Corp. failed to attain the required majority when it won the support of only 48 percent of Canadian creditors by the dollar value of claims, despite receiving 77 percent approval by number of creditors.