German firm unable to pursue N.L. deal: lawyer
A German company that was scheduled to deliver a comprehensive plan to take over an idled newsprint mill in central Newfoundland is in bankruptcy protection and cannot pursue Canadian ventures, CBC News has learned.
Lott Feinpappen GmbH & Co. was revealed earlier this month as the German company that toured the former AbitibiBowater newsprint mill in Grand Falls-Windsor.
Provincial Natural Resources Minister Kathy Dunderdale said last week that a letter of intent that had already been received was to be followed Monday with a formal business plan.
But Lott Feinpappen, based in Achern, Germany, petitioned for bankruptcy protection on June 15, several weeks after the company made an on-site visit to Grand Falls-Windsor.
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.
CBC News attempted to reach Lott managing director Bob Roche, a Canadian-based businessman, but calls were not returned.
Roche was appointed to that position last year when Lott was sold to a private equity firm.
Roche has other business interests in Toronto, including Roche Investment Holdings. Another company, BTP Invest, says it "acquires, revitalizes and grows financially challenged and/or underperforming companies and real estate." Calls to these companies were also not returned.
Dunderdale was not available for an interview on Monday. An official with her office said that the provincial government was still expecting a business plan from Lott, with detailed financial information, and that the government would conduct due diligence on the company.
Montreal-based AbitibiBowater shut down the newsprint mill in Grand Falls-Windsor in 2009, and is itself trying to restructure its affairs through bankruptcy protection. The Newfoundland and Labrador government seized Abitibi's hydro and timber assets before the closure and disclosed earlier this year that it had inadvertently also seized the mill.