In early December 2008, AbitibiBowater announced various capacity-reduction measures, including the permanent closure of its Grand Falls mill, as a result of the economic downturn and decline in product demand. In retaliation, the province hastily passed Bill 75, without any attempt to consult with the company and without holding any public hearings.

The company has asserted in the Notice of Intent that Bill 75 unquestionably breaches Canada's NAFTA obligations on a number of grounds, including among others: 

• Basis of Expropriation: NAFTA explicitly details the grounds under which government expropriation can occur. The criteria for expropriation are not met in Bill 75.
• Fair Compensation: AbitibiBowater is entitled to immediate, full and fair compensation. Bill 75 does not ensure payment for the fair market value of the expropriated rights and assets.
• Denial of Justice: Bill 75 purports to strip AbitibiBowater of any rights to access the courts, which is independently a violation of NAFTA.
• Discrimination: AbitibiBowater should be afforded the same rights and privileges as all other domestic and foreign investors. Bill 75 is retaliatory in nature and discriminates against the Company.

 "AbitibiBowater has been operating in Newfoundland and Labrador for more than a century, contributing significantly to the region's economic, social, and sustainable development," stated David J. Paterson, president and chief executive officer. "The nationalization of our assets was unexpected and an unnecessary course of action. It came despite our proactive outreach to form a joint working group to address and resolve all issues related to our rights and assets in the province. The company remains open to seeking a collaborative resolution with the federal and provincial governments."

The expropriation relates to a broad range of AbitibiBowater's rights in Newfoundland and Labrador, including land rights, timber rights, water use rights, and various other related rights and business partnerships. These rights can be traced back in part to grants by the provincial government and its predecessors, and to other third-party transactions. In addition to the substantial sums it expended to acquire these rights, the company has invested hundreds of millions of dollars in the province over the last century, ranging from capital investments in mill operations to road projects that have helped build rural Newfoundland.

Because the company is incorporated in the state of Delaware and carries out business activities in the United States, the expropriation of rights and assets represents a breach of Canada's obligations to a U.S. investor under Chapter 11 of NAFTA. The company has filed this notice as part of the dispute resolution mechanism available under NAFTA and will submit the claim to arbitration in three months, pursuant to the relevant NAFTA provisions, should this matter not be resolved by that date.

"It is our obligation to defend the interests of our shareholders and ensure we receive compensation for the fair market value of the expropriated assets, plus additional damages. With this notice, we have taken the first step in pursuing legal actions," said Paterson.

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp, and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom, and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets under the stock symbol ABWTQ.