Bear Island Paper Co., a newsprint producer, won bankruptcy court approval to seek votes on its amended liquidation plan.
U.S. Bankruptcy Court Judge Douglas O. Tice Jr. in Richmond, Virginia, ruled today that the disclosure statement explaining the proposal provides enough information for creditors to make an informed decision. A hearing on confirmation of the plan is scheduled for Nov. 22.
The plan will give holders of certain secured and unsecured claims totaling about $531.4 million a recovery of 0.5 percent to 4 percent, court papers show. Holders of intercompany claims totaling $135.9 million would receive the same recovery while shareholders would get nothing.
Bear Island sought bankruptcy court protection in February 2010 citing the declining demand for newsprint. The Ashland, Virginia-based company listed assets of more than $100 million and debt of more than $500 million in Chapter 11 documents filed in U.S. Bankruptcy Court in Richmond.
The case is In re Bear Island Paper Co. LLC, 10-31202, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).