VANCOUVER, British Columbia (Reuters) - The fate of Pope & Talbot Inc.’s PTBT.PK pulp mills and hundreds of workers sat in limbo as lenders squabbled on Wednesday over what do to with the insolvent firm.
Lawyers for Pope & Talbot warned a joint U.S.-Canada bankruptcy court hearing the firm is out of cash and a deal on interim financing is needed if the three mills are to keep operating even for a few more days.
The company and creditors were sent scrambling last week when a deal to sell the facilities to a unit of Sinar Mas Group’s (SMMA.JK) Asia Pulp & Paper Co. fell through.
One attorney at the hearing being overseen jointly by a Canadian judge in Vancouver and a U.S. judge in Delaware likened the chaotic financial and legal situation to a “monkey’s wedding.”
The company said on Wednesday it has been approached by other potential buyers for the facilities, but has not yet been able to talk to them.
If the court orders the mills shut down immediately, the company may then have to deal with the cost of beginning potentially costly environmental cleanup, the hearing was warned.
The Mackenzie and Harmac pulp mills in British Columbia and the Halsey mill in Oregon have a combined annual capacity of about 830,000 tonnes and employ more than 900 workers.
Also in limbo is Pope & Talbot’s idled sawmill in Fort Saint James, British Columbia, which had also been scheduled to be sold to the Asian firm.
The company earlier this year sold its Castlegar and Grand Forks, British Columbia, sawmills and one in Spearfish, South Dakota, to International Forest Products Ltd. IFPa.TO, which then immediately spun off the U.S. facility to a private owner.
Pope & Talbot’s Midway, British Columbia, sawmill was also sold to a private owner.
Reporting Allan Dowd; editing by Renato Andrade