British Columbia · CCAA
Affidavit of Bruce Chapman, sworn
Affidavit · 16 June 2020
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What we verified from this filing4 verified
- secured creditorsnote: Related party - PEC owns 30% of the Petitioners and is described as the Petitioners' largest creditor. This security (the Azure Security) is POSTPONED/SUBORDINATED in favour of the Province of Nova Scotia pursuant to the Azure Postponement Agreement (effective April 15, 2009) and the Howe Postponement Agreement (September 17, 2013). PEC also holds unsecured Note Indebtedness from Northern Pulp (~$133.5M) and 105 BC ($49,925,965), not included here as those are unsecured. · page: 16 · as of: 2020-06-16 · amount: 29859548.23 · debtor: Northern Pulp Nova Scotia Corporation · creditor: Paper Excellence Canada Holdings Corporation (PEC) (assignee of Azure Mountain Capital Financial Corporation / Howe Sound Pulp & Paper Corporation) · currency: CAD · security: Azure Security: three Collateral Mortgages dated June 24, 2008 over specified PIDs, and a General Security Agreement dated June 24, 2008 over all present and after-acquired property of Northern Pulp. Originally granted to Azure Mountain Capital Financial Corporation under a Secured Credit Agreement whose facility limit was increased from $25,000,000 to $32,000,000 via four amendments (2008-2011) - a facility limit, not a balance. Assigned to Howe Sound Pulp & Paper Corporation in 2011 (secured debt then ~$31,958,035) and subsequently to PEC in 2015.
- secured creditorsnote: Guaranteed by Northern Timber (NT Province Guarantee) and Northern Resources (NR Province Guarantee), each dated September 19, 2013; Northern Timber's guarantee further secured by the NT Guarantee Collateral Mortgage dated September 17, 2013. This Province security ranks senior to the Azure/PEC security by postponement agreements. Payments deferred per the June 2020 Extension Letter, subject to Northern Pulp actively pursuing regulatory approval for the Mill. · page: 19 · as of: 2020-06-16 · amount: 20093700 · debtor: Northern Pulp Nova Scotia Corporation · creditor: Province of Nova Scotia · currency: CAD · security: Northern Pulp NS Collateral Mortgage dated April 14, 2009 (amended September 17, 2013) over specified PIDs; Northern Pulp NS General Security Agreement dated April 14, 2009 (amended September 19, 2013) over all present and after-acquired personal property of Northern Pulp. Arises under two Letters of Offer (NS Offer Letter 'A' - $15,000,000 loan; NS Offer Letter 'B' - $17,200,000 loan), both original principal amounts, not balances.
- secured creditorsnote: Loan payments for the April-June 2020 period were postponed per the NT 2020 Extension Letter dated May 19, 2020; further deferral of interest/principal per the June 2020 Extension Letter, subject to Northern Pulp actively pursuing regulatory approval for the Mill. · page: 23 · as of: 2020-06-16 · amount: 64780546.45 · debtor: Northern Timber Nova Scotia Corporation · creditor: Province of Nova Scotia · currency: CAD · security: $75,000,000 Debenture dated March 11, 2010 (original registered/principal amount, not balance), granted by Northern Timber in favour of the Province, arising under the NT Offer Letter dated February 24, 2010 (a $75,000,000, 30-year loan). Guaranteed by Northern Pulp (NP Province Guarantee dated March 11, 2010), secured by a General Assignment of Rents and Other Monies dated March 11, 2010 over specified PIDs. Further secured by a Share Pledge Agreement dated March 11, 2010 granted by NTNS LP (Northern Timber's sole shareholder) pledging all shares of Northern Timber.
- financial positionnote: Total liabilities figure is stated as 'approximately $244,017,507', including trade payables and accruals of approximately $4,791,347.10. Document states liabilities exceed book value of assets by approximately $131,292,845 and that realizable value of assets is materially less than obligations given the Mill cannot operate without the Replacement ETF. · page: 25 · as at: 2020-04-30 · basis: unaudited financial statements - approximate book value · scope: Northern Pulp Nova Scotia Corporation (entity-level) · currency: CAD · total assets: 112724662 · total liabilities: 244017507