Catalyst Paper has announced that a claim filed against it by Quebecor World (USA)’s litigation trustee for alleged preferential transfers of approximately US$18.8 million is not expected to result in any significant liability to Catalyst. The claim seeks the return of payments made by Quebecor World to Catalyst in the ordinary course of their trade relationship in the 90 days prior to Quebecor World’s Chapter 11 filing in December, 2007. Catalyst is one of 1700 vendors of Quebecor World who received payments totalling US$390 million during the preference period in which the litigation trustee has sought recovery. The claim is made pursuant to the U.S. Bankruptcy Code which allows recovery of certain transfer made by the bankrupt debtor within the 90 days prior to the bankruptcy filing, subject to a vendor’s defences.
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. Accordingly, Catalyst does not expect to incur any significant liability in connection with the Quebecor World claim.
