Catalyst Paper Clarifies Media Reports on Nature of Recapitalization Process

The company intends to implement the recapitalization through a plan of arrangement under the Canada Business Corporations Act (CBCA). Implementation of the plan of arrangement under the CBCA will be subject to approval by not less than 66⅔ percent of the votes cast by holders of each of the Senior Secured Notes and the Senior Notes at meetings to be held to consider the arrangement, the approval of the Supreme Court of British Columbia and receipt of all necessary regulatory and stock exchange approvals. In addition, the Agreement is subject to termination if a new labour agreement with all union locals at the company’s Canadian mills has not been ratified by January 31, 2012.