28 June 2010

Dunderdale still awaiting proposal from bankrupt company; spokesperson promises “due diligence”

According to cbc.ca/nl, natural resources minister Kathy Dunderdale is still expecting a business plan from a German company to take over the Grand Falls-Windsor paper mill.

An unnamed spokesperson in Dunderdale’s office promised that the department will conduct “due diligence” on the proposal.

But as Bond Papers readers learned on Sunday, the company – Lott Feinpappen – has been in bankruptcy protection since June 15.

CBC added more detail on Monday:

As well, a lawyer with the Achern firm of Schultze & Braun told CBC News that Lott does not have the cash to pursue ventures, and cannot do business in Canada because of its legal situation.

The lawyer told CBC News that Lott is currently in "deep trouble." The German state is covering workers' wages at Lott — which produces high-quality paperboard products, and which has been in business for more than a century — until the end of August.

Insolvency procedures are to start in Germany in September.

In a news release late Monday, opposition leader Yvonne Jones said that this new information on Lott “highlights [the] careless and superficial work by government in not learning and disclosing this information to the public.”

Jones said that the provincial government “likes to talk due diligence, but rarely performs it.”