Commitments And Contingencies

6 Months Ended

Jun. 30, 2011

Commitments And Contingencies

Commitments And Contingencies

14. COMMITMENTS AND CONTINGENCIES

In a notice dated January 25, 2011, staff at the Federal Energy Regulatory Commission, or FERC, reported that they had preliminarily determined that our subsidiary, Rumford Paper Company, or Rumford, violated FERC regulations in connection with Rumford's participation in ISO-New England's Day Ahead Load Response Program from July 2007 through February 2008. Under the program, participants were paid to reduce their electrical load on the New England power grid from their "baseline" load levels. FERC asserts that Rumford improperly established and maintained an artificially high baseline, allowing it to receive increased payments under the program. Rumford cooperated with FERC throughout its investigation and has denied any wrongdoing.

Claims have been made against us for the costs of environmental remediation measures taken or to be taken. We are also involved in various other litigation and administrative proceedings arising in the normal course of business. Reserves for these liabilities have been established and no insurance recoveries have been anticipated in the determination of the reserves. Although the ultimate outcome of these matters cannot be predicted with certainty, we do not believe that the currently expected outcome of any matter, lawsuit or claim that is pending or threatened, or all of them combined, will have a material adverse effect on our financial condition, results of operations or liquidity.