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Tembec court approves of land transfer, settling affiliate disputes
By Kali Hays
New York, July 22 – Tembec USA, LLC’s Chapter 7 trustee, Samra L. Abide, received approval of a transfer of company assets in order to settle all disputes related to $79.4 million in outstanding claims of two company affiliates under a Wednesday order from the U.S. Bankruptcy Court for the Middle District of Louisiana.
As previously reported, Tembec Industries Inc. and Tembec Investments USA II filed claims against the debtor in 2011 related to billed consultation and/or management services. In a 2013 adversary complaint looking to avoid the claims, Abide said that all of the charges were improperly billed to Tembec USA and were actually the overhead operational expenses of Tembec Industries.
In an effort to resolve all of the claims between the parties, Abide agreed to transfer tracts of land and related mineral interests owned by Tembec USA to Tembec Investments.
The land is near St. Francisville, La., and facilitates royalty payments related to the minerals, according to the motion.
Though the Tembec affiliates are allowed to retain their claims as non-priority unsecured claims, the amounts will be reduced by any payment received from the land transfer, including the fair market value of the property, which the parties agreed to be $1.81 million.
With approval of the settlement, Abide will withdraw the adversary complaint, and the Tembec affiliates will withdraw an adversary complaint and a separate district court action.
Tembec USA is a forest products company based in Temiscaming, Quebec, that filed for bankruptcy on April 25, 2011. The Tembec USA Chapter 7 case number is 11-10585.
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