Catalyst Paper will file for creditor protection within Canada to allow it to restructure its business and operations in an orderly manner, the Richmond-based paper manufacturer said Tuesday.
Catalyst is the latest in a series of paper producers to have succumbed to higher costs, increased competition from Asia and Europe and falling demand as more advertisers and readers move online.
Last year, Cerberus Capital-backed New-Page Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by news-print magnate Peter Brant.
Earlier this month, Catalyst sought protection under Chapter 15 of the U.S. bankruptcy code, which grants a foreign company protection from creditors and helps avoid conflicts that arise between jurisdictions involved in two independent bankruptcy proceedings.
Catalyst, which supplies retailers, publishers and commercial printers in North America, Latin America and Europe, owns mills in B.C. and Arizona.
Catalyst said its board has approved a filing for an initial order from the Supreme Court of B.C. to commence proceedings under the Canadian Companies' Creditors Arrangement Act.
The interim order would protect it from all legal proceedings on the part of its creditors.
The company said it intends to meet its obligations to employees and suppliers during the restructuring process.
Catalyst said it has been forced to shelve a previously proposed plan to recapitalize the company, because among other reasons, it failed to win the necessary levels of support from certain debt-holders.
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