AbitibiBowater shares dive on bankruptcy plan

WILMINGTON, Delaware (Reuters) - The shares of AbitibiBowater Inc ABWTQ.PK, which was the largest newsprint maker in North America when it filed for bankruptcy a year ago, plunged 70 percent on Wednesday after the company said equity holders would get no recovery in its reorganization.

The Montreal-based company filed late on Tuesday what it called a "framework" for a plan of reorganization. Under the plan, secured creditors would be paid in full and unsecured creditors would get stock in the reorganized company. Shareholders would not get a recovery under the plan.

"We anticipate that supplemental material will be filed in the coming weeks," said Seth Kursman, the company's spokesman.

Shareholders have been lobbying the Delaware Bankruptcy Court for the appointment of an equity committee, citing among other things the company's recent performance and its financial statements that show shareholder equity of about $2.5 billion.

The company filed for bankruptcy in April 2009, a victim of the steep decline in demand for newspapers.

AbitibiBowater shares closed down 70 percent at 11.1 cents per share in pink sheet trading.

An attorney for unsecured creditors did not return a call for comment. Shareholders who have petitioned the court could not be reached for comment.

The case is in U.S. Bankruptcy Court, District of Delaware, No. 09-11296.

(Reporting by Tom Hals; editing by Andre Grenon)