Catalyst Paper to fight legal claim in Quebecor World (U.S.) bankruptcy
Catalyst Paper (TSX:CTL) says it will fight a claim filed against the company by the former Quebecor World (USA)'s litigation trustee for alleged preferential transfers of US$18.8 million to the Vancouver-area company before the commercial printer filed for bankruptcy protection from creditors more than two years ago.
Catalyst said Friday the claim will have no significant impact on its business.
The claim seeks the return of payments made by Quebecor World to Catalyst in their ordinary trade dealings in the 90 days before Quebecor World's Chapter 11 filing in the United States in December, 2007.
Quebecor World restructured last year and is now known as Worldcolor and is no longer connected to former parent company Quebecor Inc. (TSX:QBR.B). The Montreal-based printer recently streamlined some of its Canadian printing plants to improve its efficiency.
Catalyst is one of 1,700 vendors of Quebecor World who received payments totalling US$390 million during that 90 day period.
The claim was filed under the U.S. Bankruptcy Code, which allows an insolvent debtor to seek a return of payments made in the 90 days before a bankruptcy filing, subject to a vendor's defences.
Catalyst is one of 1,700 suppliers to Quebecor World who received payments totalling US$390 million during that 90-day period.
"Catalyst intends to defend the claim and has been advised that it has a number of defences available that are expected to eliminate or significantly reduce its financial exposure," the paper company said in a release late Friday.
"Accordingly, Catalyst does not expect to incur any significant liability in connection with the Quebecor World claim."
Catalyst Paper is based in Richmond, B.C. and operates six mills in British Columbia and Arizona, producing specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe.
Catalyst Paper (TSX:CTL) says it will fight a claim filed against the company by Quebecor World (USA)'s litigation trustee for alleged preferential transfers of US$18.8 million to the Vancouver-area company. Catalyst says the claim will have no significant liability on its business.