Catalyst Paper Completes CCAA Restructuring

Catalyst Paper Corporation completed its restructuring under the Companies' Creditors Arrangement Act on September 13, 2012. As a result of the restructuring and related transactions, Catalyst Paper reduced its debt by $390 million, eliminated $80 million of accrued interest and reduced annual interest expense and other cash costs by approximately $70 million.

The restructuring was completed pursuant to the terms of a Restructuring and Support Agreement dated March 11, 2012, as amended, entered into between Catalyst Paper and certain holders of its $390.4 million 11 per cent senior secured notes due December 15, 2016 (“First Lien Notes”) and its $250 million 7⅜ per cent senior unsecured notes due March 1, 2014 (“Unsecured Notes”). The restructuring, which included more than 40 court appearances and extensive negotiation with various stakeholder groups, was approved at creditor meetings held on June 25, 2012. This approval followed certain amendments to the plan of arrangement which were made following creditor meetings held on May 23, 2012, which failed to provide the requisite creditor approval.

Catalyst Paper was represented throughout the restructuring by its Vice-President and General Counsel, David Adderley, who was assisted by a team from Blake, Cassels & Graydon LLP led by Peter Kalbfleisch and Bill Kaplan that included Steven McKoen, Michelle Audet, Mischa Zajtmann, Ashley Baker and Nathan Kim (corporate and securities); Peter Rubin, Jeff Langlois and Andrew Crabtree (insolvency and litigation); Michael Birch and Jyotika Reddy (financial services) and Bruce Sinclair and Soraya Jamal (tax). Skadden, Arps, Slate, Meagher & Flom LLP acted as US counsel to Catalyst Paper, with a team comprising Christopher Morgan, Ryan Dzierniejko and Vittoria Varalli (corporate and securities) and, with respect to the United States Bankruptcy Court Chapter 15 proceedings, a team led by Van Durrer and including Annie Li and Kimberly Jaimez (corporate restructuring). Lawson Lundell LLP represented Catalyst Paper with respect to its new asset backed loan facility and pension matters with a team consisting of Ken Burns (pension) and Michael Low, James Sutcliffe, Meghan Popp and Kyla Schwartz (financial services).

Certain holders of Catalyst Paper's First Lien Notes who, on successful completion of the plan of arrangement proceedings received approximately 99 per cent of Catalyst Paper's equity and $250 million of new secured debt, in addition to having provided a $35 million exit notes facility were represented in the US by a team from Akin Gump Strauss Hauer & Feld LLP that included Michael Stamer, Stephen Kuhn, Brian Kim, Meredith Lahaie and Jeremy Smith; and in Canada by a team from Fraser Milner Casgrain LLP led by John Sandrelli, Ryan Jacobs and Gary Sollis that included Shayne Kukulowicz, Ross Walker, Michael Wunder, Jordan Schultz and Tevia Jeffries (insolvency and litigation); Tim Bezeredi, Alan Hutchison, and Terence Whalen (financial services and corporate); Mary Picard (pensions); Andrea Raso Amer (employment and labour matters) and Lori Mathison (tax).

Certain holders of Catalyst Paper's Unsecured Notes were represented with respect to Canadian matters by a team from Goodmans LLP led by Robert Chadwick and Melaney Wagner that included John Uhren (restructuring); Jeffrey Citron and Michael Bertrand (finance); Tim Heeney (corporate) and Carrie Smit (tax) and with respect to US matters by Kramer Levin Naftalis & Frankel LLP.

JP Morgan Chase Bank, N.A, the agent for the exiting group of DIP Lenders to Catalyst Paper, was represented by McMillan LLP with a team including Peter Reardon and Wael Rostrom.

The new senior lending group consisted of Canadian Imperial Bank of Commerce, as administrative agent, co-collateral agent and lender, Wells Fargo Capital Finance Corporation Canada, as co-collateral agent and lender and Export Development Canada, as lender. The lenders were represented by a team from McCarthy Tétrault LLP which included Joel Scoler, Richard Higa, Ana Badour and D.J. Lynde (financial services); Conrad Rego (real estate) and James Gage (bankruptcy and restructuring).

PricewaterhouseCoopers Inc. acted as the court appointed monitor for the restructuring. PricewaterhouseCoopers Inc. was represented by a team from Fasken Martineau DuMoulin LLP that included John Grieve, Kibben Jackson and Vicki Tickle (insolvency and litigation).