Weyerhaeuser and residents in the small community of Sturgeon Falls, Ontario, are waiting for a Superior Court decision that could have a drastic effect on both parties.
Lawyers for the West Nipissing Economic Development Corp. and Weyerhaeuser just completed their closing arguments following two days of disputing the conditions and terms of an 11-year-old agreement. A decision is now expected to be made by the end of November on whether the courts should grant an injunction to force the forest products company to continue operating its mill in Surgeon Falls.
The West Nipissing Economic Development Corp. is calling for the injunction as part of a $100-million lawsuit. The corporation claims that Weyerhaeuser breached a 1991 contract, that was signed by the mill’s previous owner, by terminating the agreement without providing written notice and neglecting fiduciary duties owed to the community.
In total, 140 people could be out of work as Weyerhaeuser is expected to close the Sturgeon Falls facility as early as Nov. 30. The company says that there is a market surplus of three to five million metric tons of corrugated cardboard in North America, and they also claim that there would be no customers to sell the product to if the mill were to continue to operate.
The mill’s previous owner and the corporation had entered into a joint venture to save the mill from closing when the business was forced to contend with staggering costs associated with new water-quality regulations. Over $1 million was raised by the community and more than $8 million was solicited in both private and government grants and loans to aid in the transformation of the facility into a corrugated cardboard recycling facility.
The agreement was to remain in effect until Aug. 30, 2012. The agreement also included a supply contract of 70,000 metric tons of the corrugated cardboard annually to Smurfit-Stone until next September. Northern Ontario Business