A deal with a key union has uplifted AbitibiBowater from the bankrupt status, but has been posed with restrictions by the Environmental protection authorities of Newfoundland and Labrador requiring the company to cleanse the five states it owned or owns.

Jean-Philippe Côté, the company's Director of Public Affairs for Canada said, "If Newfoundland was successful in the current issue before the courts, it would compromise AbitibiBowater's ability to emerge from creditors' protection".

In a report submitted to the court by the monitor Ernst & Young, Newfoundland's environment protection orders related to five sites, including the company's Grand Falls mill, 50 logging camps and a mining operation site. The cost associated with making the five states dirt- free is approximately about $50 million or it may also exceed several times this figure.

If Newfoundland and Labrador put them forward and disagree to treat the claims under the Company Creditors Arrangement Act, then the environmental claims will be treated as liabilities and will potentially get priority.

Ernst and Young said, "The outcome of this motion could have far-reaching consequences both in this restructuring and in other large, heavy industry restructurings where potential environmental obligations are of concern".