Forestry contractors for NewPage receiving money

Nancy King
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[Point Tupper, NS] — The forestry contractor owed the single largest amount of money when NewPage Port Hawkesbury filed for protection from its creditors says he expects to receive partial payment by early next week (Dec. 5).

Paul Delaney of Delaney and Son in Cheticamp said Thursday (Dec. 1) he’s been told he could receive about 28 per cent of the close to $300,000 he is owed as early as today.

“I don’t think there’s a lot of people out there that realize how much money that is when you’re running a small business,” he said.

Collectively, contractors were owed more than $4 million for work that they did to deliver wood to the mill site between Aug. 22 and a deadline set by NewPage.

Partial payments from the $1.35-million fund set up by NewPage to compensate contractors owed money began flowing in the past couple of days. Additional payments are expected down the road once the revenue from the sale of the wood inventory is collected.

One of Claude Bourgeois’ two companies has already received a partial payment. The head of the Northeastern Pulp Truckers Association said he’s been receiving calls from other contractors wondering why they haven’t been paid.

He noted that when claims were approved, monitor Ernst & Young sent financial offers to the contractors, who in many cases didn’t realize that they had to reply to indicate they were accepting the offers.

“I was told that by (Friday) anybody who didn’t reply, it means they’re accepting it and they’re going to send out cheques,” Bourgeois said.

There is also an appeals process for those whose claims were refused.

The wood inventory was valued at just over $1 million, based on its weight. Bourgeois noted the wood is being reweighed, as it loses moisture as it ages. Most of the wood that was left in the highlands and pulpwood that was in the mill yard have been sold to Northern Pulp in Pictou County, while the studwood in the mill yard has been sold to JD Irving.

Bourgeois expects that once payment for the wood is collected, it will range from $875,000-$1 million, and it will then be used to make an additional payment to contractors, so approved claims will ultimately receive about 70 cents on the dollar.

“Getting full payment would have been nice, but facing a bankruptcy, sometimes you get close to nothing ... we’re still probably luckier than we could have been,” Delaney said.

Delaney noted he has moved his equipment to the mainland to perform work for Bowater, which is located in Liverpool. He has four harvesters currently undergoing training as part of a $14-million provincial forestry strategy.

“We’ve been lucky so far, we’ve been able to keep operating to a certain point,” he said. “Things are starting to get pretty tight, it would be good to see payment of that money soon.”

But he has lost two of his employees who opted to go west where the money is better rather than go to work in another area of the province.

Cape Breton Post        


Organizations: Northeastern Pulp Truckers Association, Bowater

Geographic location: Cheticamp, Pictou County, Liverpool Cape Breton

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