Not worth it

Dave Bartlett
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Province won't pursue legal action against Abitibi

Premier Danny Williams says it's not worth the province's while to proceed with a court case against AbitibiBowater.

In the House of Assembly Wednesday, Liberal Leader Yvonne Jones asked for an update on the court proceedings.

"The latest court actions of your government has been an attempt to force the company to reveal corporate financial information using the argument that the province is, in effect, a creditor of the company," Jones said during question period.

Premier Danny Williams told reporters outside the House of Assembly Wednesday the province will not be pursuing a lawsuit against AbitibiPrice following the paper mill closing in Grand Falls-Windsor last year. - Photo by Gary Hebbard/The Telegram

Premier Danny Williams says it's not worth the province's while to proceed with a court case against AbitibiBowater.

In the House of Assembly Wednesday, Liberal Leader Yvonne Jones asked for an update on the court proceedings.

"The latest court actions of your government has been an attempt to force the company to reveal corporate financial information using the argument that the province is, in effect, a creditor of the company," Jones said during question period.

Justice Minister Felix Collins replied by saying the province has backed away from the court action.

"The position of the government is we are not pursuing these claims because there's insufficient funds ... with Abitibi to compensate (the province) for those claims," he said.

Outside the House, Williams told reporters it's likely only about 80 per cent of Abitibi's creditors will be paid if it goes bankrupt.

The province is looking to recoup what it's paid as severance to laid off workers in Grand Falls-Windsor - a number that could exceed $40 million - after the company shuttered the mill this past spring.

But Williams said that money would be considered an unsecured debt, and therefore, far down on the list of what the company owes to its creditors.

Therefore paying legal costs to try and get money the province likely won't be able to recoup isn't worth it.

But Williams also said there is "a real possibility" the province won't have to pay Abitibi for expropriating its brick and mortar assets either.

When the province expropriated the company's water and timber rights about a year ago, it said it would fairly compensate Abitibi for things like dams and power plants.

But Williams said severance payments and the company's environmental liabilities would be subtracted from the fair market value of those assets.

The province is currently trying to put a price tag on what it will cost to clean up environmental damage the company left behind in Grand Falls-Windsor, Botwood and Buchans.

"If the assets do not exceed the liabilities then there would be no cash payment coming from the government," said the premier. "Our assessment, at this particular point in time, is that there would not be a net payment to Abitibi."

He also said if Abitibi does go bankrupt, it would likely kill a challenge the company launched under the North American Free Trade Agreement against the expropriation.

Jones also spoke to reporters outside the House on the issue.

She said the government created a lot of hype when it announced the expropriation and the legal action.

But she said there was little fanfare when it walked away from the legal case.

"This may be the right decision right now for the government, simply because we are able to pay out the severance we need to for the workers," Jones said.

But she said it's hard to know until more information is known on what the liabilities are versus what the province will offer Abitibi for the brick and mortar assets.

dbartlett@thetelegram.com

Geographic location: Abitibi, Grand Falls-Windsor, Botwood Buchans

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Recent comments

  • Larry Murphy
    July 02, 2010 - 13:34

    Bones the resident defender of everything Danny Williams and paid very well to do just that.If Danny found a way to have all opposition to his dictatorship executed Bones would have a long list of reasons why that should happen. That says a lot about the Danny worshipers I guess.

  • don
    July 02, 2010 - 13:34

    Very magnanimous of you Mr. Premier! The Williams Government is partly responsible for the fact that Abitibi is in a financial mess. Taking the company to court would be adding insult to injury. I think that Abitibi should sue the Government of Newfoundland and Labrador. I expect that some very interesting information and documents would come to light at the discovery meetings during preparation for that case.

  • Taxpayer ll
    July 02, 2010 - 13:32

    Ha ha Don b'y your always good for a laugh. The workforce, and their union voted themselves out of a job, then went crying to gov. for a handout. the forestry sector is in a downward spiral across NA. it's only a matter of time before the plant in Cornerbrook closes up completly, then we'll be on the hook for another handout. The only bright spot in this sorry story is the the premier had the nads to expropriate the hydro resource, which, after a 100 years of the gov. artificially propping up the mill was really the provinces anyway. it is Abitibi that did the back stabbing here, it was the williams gov. that reached out a helping hand.

  • david
    July 02, 2010 - 13:30

    Don, it seems like the Gov. don't want any other business to develop the forest industry in Central, considering there was 9 proposals made to gov, and still no talk of a SUITABLE proposal. I guess if the gov allows a forest industry to take root again, then Central will make sure that some of that cheap hydro be used to keep the industry viable on a go forward basis, So, there goes part of NALCOR's slush fund.When Danny played Santa this time last year, and put Abitibi on the naughty list, and expropriated the goodies, he was really playing the union,and the towns of central, and even Nfld into thinking it was being done for them, when in reality it was NALCOR's never ending slush fund that takes in more money then the Upper Churchill. So Merry Christmas Central, i guess you were not good this year and Danny put you on the naughty list, not getting your power, not getting your forest industry back, and the list of not getting continues..........

  • well
    July 02, 2010 - 13:30

    noooooooooooo that 40 million isnt gone , they gave themselves raises instead. Do you really thing this goverment would bail anyone out?
    You all forget this is a gover that would let peaple starveand make sure no one got a head no matter how hard they try, not unless your just get out of jail or from another counrty then your gold and we all seen that didnt we danny

  • Jerome
    July 02, 2010 - 13:30

    The expropriation of Abitibi Bowater assets was done for one reason and one reason only:NALCOR!
    Remember that arm of NL Hydro that was supposed to make this province a warehouse or storehouse (I forget the exact terminology) of energy?
    Anyone remember the premier saying FPI is in hostile hands ? (It's in hansard)
    What happened to FPI? It's obvious who owns the lucrative assets of that company, and their interests are not benefiting the people of Newfoundland and Labrador.
    We are now trying to get help from Nova Scotia to yield phantom power to the United States.
    We love fighters, don't we?
    Peckford - They sold the shop
    Wells - Meech lake
    Tobin - Turbot
    We have to take off the blinders or we are destined to be saddled with another saviour after this one. Maybe the next leader will promise to put rural Newfoundland and Labrador back to what it was 50 years ago. We would go for that, wouldn't we?
    That's how gullible we are.

  • Bones II
    July 02, 2010 - 13:30

    don: Magnanimous? Partly responsible? AB's circumstance was caused by a global economic recession and bad management during it. Our natural resource could have easily been sold outside the province, but opposition likes to ignore that fact. AB has offices and mills in other parts of our country and other countries that are in just as bad shape, if not worse, than the mill they had here. It's been getting progressively worse for them ever since the mill closure here and they can no longer count on payment for assets under the expropriation flag. AB is a dead stick, it's just a matter of time. Pay attention and you'll hear complaints from the places it matters most - AB doesn't matter here any longer.

  • Einstein
    July 02, 2010 - 13:29

    Danny played that chess game perfectly. Had he chose to settle with AB outside of court, NL would be out even more than $40m paid to that special interest group, and those rewards would have gone to other creditors as AB went brankrupt. Not settling also weakened AB further making it more unable to take anyone to court. Nice play Mr. Williams. All those pro-AB traitors who had wished AB hurt NL'ers can now eat crow. Danny is the man.

  • GeraldNL
    July 02, 2010 - 13:27

    Now that Abitibi workers may lose 30% of their pensions, the NL Government is considering paying that as well. Where will the money come from? Why, the NF pensioners of course. The Government robbed us before, and they are doing it again,.

  • Jason
    July 02, 2010 - 13:27

    'don' why should a Provincial government spend taxpayers money on propping up a company in it's death throes ? To help pay off it's creditors in Quebec, the United States and other countries ? AB had already lost most of it's major customers in an effort to reduce their exposure to environmental and reputational risk. The writing was on the wall. Why do you wish so much harm to your own people ? You make no sense man. Danny even disarmed AB from being able to make a counter-strike in court. They ran out of money ! Danny did an Excellent job on this one. Nice to have a very successful lawyer voluntaring his time as Premier. That's dedication to your people. Something you should learn.

  • Taxpayer ll
    July 02, 2010 - 13:25

    Man, the province comes up with 40 million dollars of hard earned taxpayer dollars, and Ms. Jones still manages to find something to snarl about.
    I hope the province doesn't pay one red cent to Abitibi, let them take us to court first, then pay all the restitution, including the enviromental liabilities, and the upkeep on the hydro facility etc.

  • Politically Incorrect
    July 02, 2010 - 13:23

    Laid off workers are a 'special interest group?' Fair enough. Is the corporate sector, or the oil industry a 'special interest group?' Are you not a member of a 'special interest group?' Are Newfoundlanders a 'special interest group?' When we dismiss someone as a member of a 'special interest group' (a common Conservative tactic when applied to minority groups to elicit the fear / anger / resentment from everyone else) then we are dismissing ourselves, as we are all members of several 'special interest groups.'

  • Jerome
    July 02, 2010 - 13:22

    We are going to launch a legal challenge against Quebec, and for what? Political expediency comes to mind.

  • Bones II
    July 02, 2010 - 13:20

    Way off base, Don, yet again. The government of Newfoundland and Labrador did nothing because there wasn't a single thing they COULD do. The pulp and paper industry was in crisis LONG BEFORE this came to pass and AB knew it. They could have streamlined that mill at least twice and did not despite the need to do it in order to remain viable. Governments do not make corporations viable. Good, profit making plans with proactive contingencies in place to guard, as best as can be done do that. Added plans of attack against the unknown variables should have been a managerial consideration as well.


    Williams made a proactive move here by expropriating the very assets that represented his 'unknown' or his 'variables', in my opinion, and that sucked the wind completely out of AB's plans to sell our resource out from under our noses.



    Tell us, Don, do you not recognize the jeopardy the entire industry is in, globally? Do you believe Newfoundland and Labrador's operation was a large percentage of AB's assets? Do you think allowing AB to keep, and eventually sell, these resources would have save the corporation from its financial woes? Do you remember the seniors that the company has already screwed out of their pensions? Are you aware of just how much this company owes? I think your answers are NO to all the above questions. AB deserves NOTHING from the people, or the government of Newfoundland and Labrador, PERIOD.

  • Dave
    July 02, 2010 - 13:17

    There goes 40 million of our tax dollars to a special interest group. There are lots of businesses that go bankrupt and the government does not pay their severance.

  • Howard Martin
    July 02, 2010 - 13:16

    Williams got the Hydro power thats really all he ever had any interest in anyway. Hes good at playing with other peoples lives for his own benefit. Glad to see your still quick to defend King Danny Bones. As pathetic as ever.

  • don
    July 02, 2010 - 13:14

    Bones: The Government of Newfoundland and Labrador did practically nothing to assist Abitibi to remain viable in this Province.Danny and his cronies wanted Abitibi's hydro-electric power generation assets and were in a big hurry to expropriate them from Abitibi. The real reasons why that expropriation was undertaken have yet to be revealed. If Abitibi sued the Government of Newfoundland and Labrador the truth would come out. Your attitude is the the same as Danny Williams. Danny is the reason why no board of directors of any American or mainland Canadian corporation in their right mind would come to Newfoundland and Labrador to develop the forestry sector. Nobody wants to deal with a back stabbing Government that can't be trusted!

  • Robert
    July 02, 2010 - 13:13

    Good on you Ms. Jones for giving this situation the attention it deserves and bringing information to the public that the government was willing to sweep under the carpet.

  • Charles Pope
    July 02, 2010 - 13:12

    Don theres a very good reason Bones sounds like and has the same attitude as Danny Williams. If people havent figured Bones out yet they slowly but surely will.

  • Larry Murphy
    July 01, 2010 - 20:24

    Bones the resident defender of everything Danny Williams and paid very well to do just that.If Danny found a way to have all opposition to his dictatorship executed Bones would have a long list of reasons why that should happen. That says a lot about the Danny worshipers I guess.

  • don
    July 01, 2010 - 20:23

    Very magnanimous of you Mr. Premier! The Williams Government is partly responsible for the fact that Abitibi is in a financial mess. Taking the company to court would be adding insult to injury. I think that Abitibi should sue the Government of Newfoundland and Labrador. I expect that some very interesting information and documents would come to light at the discovery meetings during preparation for that case.

  • Taxpayer ll
    July 01, 2010 - 20:21

    Ha ha Don b'y your always good for a laugh. The workforce, and their union voted themselves out of a job, then went crying to gov. for a handout. the forestry sector is in a downward spiral across NA. it's only a matter of time before the plant in Cornerbrook closes up completly, then we'll be on the hook for another handout. The only bright spot in this sorry story is the the premier had the nads to expropriate the hydro resource, which, after a 100 years of the gov. artificially propping up the mill was really the provinces anyway. it is Abitibi that did the back stabbing here, it was the williams gov. that reached out a helping hand.

  • david
    July 01, 2010 - 20:19

    Don, it seems like the Gov. don't want any other business to develop the forest industry in Central, considering there was 9 proposals made to gov, and still no talk of a SUITABLE proposal. I guess if the gov allows a forest industry to take root again, then Central will make sure that some of that cheap hydro be used to keep the industry viable on a go forward basis, So, there goes part of NALCOR's slush fund.When Danny played Santa this time last year, and put Abitibi on the naughty list, and expropriated the goodies, he was really playing the union,and the towns of central, and even Nfld into thinking it was being done for them, when in reality it was NALCOR's never ending slush fund that takes in more money then the Upper Churchill. So Merry Christmas Central, i guess you were not good this year and Danny put you on the naughty list, not getting your power, not getting your forest industry back, and the list of not getting continues..........

  • well
    July 01, 2010 - 20:18

    noooooooooooo that 40 million isnt gone , they gave themselves raises instead. Do you really thing this goverment would bail anyone out?
    You all forget this is a gover that would let peaple starveand make sure no one got a head no matter how hard they try, not unless your just get out of jail or from another counrty then your gold and we all seen that didnt we danny

  • Jerome
    July 01, 2010 - 20:18

    The expropriation of Abitibi Bowater assets was done for one reason and one reason only:NALCOR!
    Remember that arm of NL Hydro that was supposed to make this province a warehouse or storehouse (I forget the exact terminology) of energy?
    Anyone remember the premier saying FPI is in hostile hands ? (It's in hansard)
    What happened to FPI? It's obvious who owns the lucrative assets of that company, and their interests are not benefiting the people of Newfoundland and Labrador.
    We are now trying to get help from Nova Scotia to yield phantom power to the United States.
    We love fighters, don't we?
    Peckford - They sold the shop
    Wells - Meech lake
    Tobin - Turbot
    We have to take off the blinders or we are destined to be saddled with another saviour after this one. Maybe the next leader will promise to put rural Newfoundland and Labrador back to what it was 50 years ago. We would go for that, wouldn't we?
    That's how gullible we are.

  • Bones II
    July 01, 2010 - 20:18

    don: Magnanimous? Partly responsible? AB's circumstance was caused by a global economic recession and bad management during it. Our natural resource could have easily been sold outside the province, but opposition likes to ignore that fact. AB has offices and mills in other parts of our country and other countries that are in just as bad shape, if not worse, than the mill they had here. It's been getting progressively worse for them ever since the mill closure here and they can no longer count on payment for assets under the expropriation flag. AB is a dead stick, it's just a matter of time. Pay attention and you'll hear complaints from the places it matters most - AB doesn't matter here any longer.

  • Einstein
    July 01, 2010 - 20:17

    Danny played that chess game perfectly. Had he chose to settle with AB outside of court, NL would be out even more than $40m paid to that special interest group, and those rewards would have gone to other creditors as AB went brankrupt. Not settling also weakened AB further making it more unable to take anyone to court. Nice play Mr. Williams. All those pro-AB traitors who had wished AB hurt NL'ers can now eat crow. Danny is the man.

  • GeraldNL
    July 01, 2010 - 20:15

    Now that Abitibi workers may lose 30% of their pensions, the NL Government is considering paying that as well. Where will the money come from? Why, the NF pensioners of course. The Government robbed us before, and they are doing it again,.

  • Jason
    July 01, 2010 - 20:15

    'don' why should a Provincial government spend taxpayers money on propping up a company in it's death throes ? To help pay off it's creditors in Quebec, the United States and other countries ? AB had already lost most of it's major customers in an effort to reduce their exposure to environmental and reputational risk. The writing was on the wall. Why do you wish so much harm to your own people ? You make no sense man. Danny even disarmed AB from being able to make a counter-strike in court. They ran out of money ! Danny did an Excellent job on this one. Nice to have a very successful lawyer voluntaring his time as Premier. That's dedication to your people. Something you should learn.

  • Taxpayer ll
    July 01, 2010 - 20:11

    Man, the province comes up with 40 million dollars of hard earned taxpayer dollars, and Ms. Jones still manages to find something to snarl about.
    I hope the province doesn't pay one red cent to Abitibi, let them take us to court first, then pay all the restitution, including the enviromental liabilities, and the upkeep on the hydro facility etc.

  • Politically Incorrect
    July 01, 2010 - 20:08

    Laid off workers are a 'special interest group?' Fair enough. Is the corporate sector, or the oil industry a 'special interest group?' Are you not a member of a 'special interest group?' Are Newfoundlanders a 'special interest group?' When we dismiss someone as a member of a 'special interest group' (a common Conservative tactic when applied to minority groups to elicit the fear / anger / resentment from everyone else) then we are dismissing ourselves, as we are all members of several 'special interest groups.'

  • Jerome
    July 01, 2010 - 20:06

    We are going to launch a legal challenge against Quebec, and for what? Political expediency comes to mind.

  • Bones II
    July 01, 2010 - 20:04

    Way off base, Don, yet again. The government of Newfoundland and Labrador did nothing because there wasn't a single thing they COULD do. The pulp and paper industry was in crisis LONG BEFORE this came to pass and AB knew it. They could have streamlined that mill at least twice and did not despite the need to do it in order to remain viable. Governments do not make corporations viable. Good, profit making plans with proactive contingencies in place to guard, as best as can be done do that. Added plans of attack against the unknown variables should have been a managerial consideration as well.


    Williams made a proactive move here by expropriating the very assets that represented his 'unknown' or his 'variables', in my opinion, and that sucked the wind completely out of AB's plans to sell our resource out from under our noses.



    Tell us, Don, do you not recognize the jeopardy the entire industry is in, globally? Do you believe Newfoundland and Labrador's operation was a large percentage of AB's assets? Do you think allowing AB to keep, and eventually sell, these resources would have save the corporation from its financial woes? Do you remember the seniors that the company has already screwed out of their pensions? Are you aware of just how much this company owes? I think your answers are NO to all the above questions. AB deserves NOTHING from the people, or the government of Newfoundland and Labrador, PERIOD.

  • Dave
    July 01, 2010 - 19:57

    There goes 40 million of our tax dollars to a special interest group. There are lots of businesses that go bankrupt and the government does not pay their severance.

  • Howard Martin
    July 01, 2010 - 19:57

    Williams got the Hydro power thats really all he ever had any interest in anyway. Hes good at playing with other peoples lives for his own benefit. Glad to see your still quick to defend King Danny Bones. As pathetic as ever.

  • don
    July 01, 2010 - 19:53

    Bones: The Government of Newfoundland and Labrador did practically nothing to assist Abitibi to remain viable in this Province.Danny and his cronies wanted Abitibi's hydro-electric power generation assets and were in a big hurry to expropriate them from Abitibi. The real reasons why that expropriation was undertaken have yet to be revealed. If Abitibi sued the Government of Newfoundland and Labrador the truth would come out. Your attitude is the the same as Danny Williams. Danny is the reason why no board of directors of any American or mainland Canadian corporation in their right mind would come to Newfoundland and Labrador to develop the forestry sector. Nobody wants to deal with a back stabbing Government that can't be trusted!

  • Robert
    July 01, 2010 - 19:52

    Good on you Ms. Jones for giving this situation the attention it deserves and bringing information to the public that the government was willing to sweep under the carpet.

  • Charles Pope
    July 01, 2010 - 19:49

    Don theres a very good reason Bones sounds like and has the same attitude as Danny Williams. If people havent figured Bones out yet they slowly but surely will.