Brascan is a major creditor of bankrupt Great Northern Paper Company. It also owns the energy facilities necessary for the operation of the mills. If Belgravia is successful in its bid for the purchase of GNP, it would have to negotiate a contract with Brascan for the supply of power.

Attorneys for Belgravia Paper say that they have been trying to negotiate a deal with Brascan.

Another objection to Belgravia’s bid is that it has been unsuccessful in its negotiations with GNP’s fourteen unions. The unions have reached agreements with two other companies, but not with Belgravia.

One fo these companies is said to be Fraser Paper, a Brascan subsidiary, while the other is Kruger.

Belgravia has earned a reputation for dealing harshly with labor unions.

Its mill in West Linn, Oregon, has been operating as a non-union facility since it was acquired by Belgravia six years ago.

Stern’s acquisition of the Winnipeg Free Press was followed by a strike, when Stern showed an unwillingness to meet employee demands.

According to Cecil Makowski, a Canadian union official, Stern is “a tight-fisted SOB who would risk millions rather than address worker’s issues.”

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Local union officials have expressed much of the same in their talks with Belgravia.

“We don’t think they are sincere in attempting to reach an agreement with us,” said one union official. “For the good of the communities and the state, we don’t support Belgravia.”

Stern says that while he is unwilliing to negotiate a union contract through the media, discussions are continuing.

On the basis of the arguments that Belgravia has not demonstrated its ability to run the mills, Judge Kornreich could rule on Friday that Belgravia’s bid for the purchase of the mill is unacceptable, opening the bid process to other offers, or forcing a liquidation sale.

-- Ken Anderson 03/20/03