Catalyst Paper Corp. Debt

[56Chevy]

For general reading re: Canadian BK vs US

Difference in Canadian law compared with U.S.

Jim Middlemiss, Financial Post · Apr. 10, 2009

As Barack Obama, the U.S. President, eyes a "quick and surgical" bankruptcy solution for ailing automakers, don’t expect the wound in Canada to be as clean or neat should car companies here seek creditor protection under the Companies’ Creditors Arrangement Act (CCAA).

That’s because of a difference in Canadian labour and insolvency law. In the United States, insolvencies can be used to end high-cost union contracts if certain procedures are followed. In Canada, however, such contracts survive insolvency and extend to successor employers who emerge from the ashes of a defunct company. A union collective bargaining agreement can also apply to an unsuspecting company that simply buys equipment, even if it’s moved to a different location and possibly even if it’s used for different purposes.

So, in the United States, you can impose a "cram down" and use the threat of bankruptcy to force unions to accept a deal. Here, that’s a tactic that doesn’t fly and the presence of a collective bargaining agreement (CBA) makes it more complex when restructuring a company.

"What it does is it skews the negotiating process among the various stakeholders and more heavily favours the employees," said Rick Orzy, an insolvency lawyer at Bennett Jones in Toronto. "It makes it harder to get a deal. The odds of a complete breakdown and liquidation get stronger."

more...

http://www.financialpost.com/news-sectors/story.html?id=1485748

As far as CPC's US operations go local BK laws apply.