The owner of the Crofton Pulp and Paper Mill has been given legal sanction to restructure its finances with the goal of hanging on to its mills on Vancouver Island.

Catalyst Paper received approval on its debt restructuring plan Thursday from the Supreme Court of British Columbia under the Companies' Creditors Arrangement Act (CCAA). It’s the second victory in one week after Catalyst received 99 per cent approval on the amended plan from creditors on Monday.

In the deal, former salaried employees of Catalyst agreed to forego some extended benefits, a move that gave them creditor status and the right to vote during the second poll on Monday. Pensioners made the concession, saving the company an estimated $7 million a year and also securing their funds in a new 15-year amortization plan.

Along with approval from the Canadian courts, the company also needs a confirmation hearing under Chapter 15 of the United States Bankruptcy Court in Delaware. That's expected to happen in mid-July.

Catalyst has been under creditor protection since Jan. 31 and needs approval from both courts before it can complete its $840 million debt reorganization, required by a deadline of Sept. 30 under the CCAA.

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