The opening bid for Northern Pulp's timberlands and some other assets is $104 million, a figure that appears unlikely to leave enough money for cleanup costs of the former mill site in Nova Scotia's Pictou County.

The details are included in the latest court filings from the company as officials prepare to ask a B.C. Supreme Court justice for an extension of their creditor protection proceeding and approval of an initial bid for key company assets.

That bid, referred to as a stalking horse agreement, is from Ontario-based Macer Forest Holdings Inc. A stalking horse bid is an offer to buy a bankrupt company or its assets that is arranged ahead of an auction and typically sets the floor price for the sale. The offer can include protections for the bidder if they are unsuccessful.

According to documents, court-appointed monitor EY determined the stalking horse agreement, which includes timberlands in various parts of the province, Crown land leases and a nursery and seed orchard in Debert, is the best way to proceed.

"The stalking horse purchase agreement benefits the petitioners because, among other things, it assures the petitioners' many stakeholders ... there will be a going-concern outcome for the petitioners' timberlands business," said Jean-Francois Guillot, chief operating officer of Northern Pulp parent company Paper Excellence Canada, in a court filing.

Timelines for next steps

If the court approves the stalking horse bid, interest will then be solicited from other known potential bidders with a deadline of Nov. 20.

If no other qualified bidders are received, the stalking horse will be selected and a final approval will be sought from the court. If qualified bids are received, the lead bid would be presented as the starting point for an auction on Nov. 27, with the successful bidder finalized the following day.

The deadline for an agreement would be Dec. 9 and the parties would be in court seeking an approval by Dec. 19.

If Macer is not the successful bidder in the latter scenario, it would be eligible for reimbursement for process expenses and a break fee worth two per cent of the final purchase price. That total fee would be capped at about $3.1 million.

The order of who gets paid

Regardless of the final price, the documents make clear there is no guarantee it will result in money to help cover the cost of cleaning up the mill site in Abercrombie Point, which was also home to a chemical plant at one point.

"If the sale price is insufficient, there will be no funds available to maintain the mill site, and the petitioners will need to seek an appropriate remedy, which may include the bankruptcy of [Northern Pulp]," the documents say.

The company's filing lays out the order in which proceeds from the sale of the timberlands must follow:

• Costs of the sale, including broker fees.

• Full repayment of interim financing Northern Pulp received throughout the process, which amounts to about $60 million.

• All amounts required to wind up the company pension plans, which -- according to a settlement agreement with the province -- is about $30 million.

• $30 million owed to the province for a past loan to buy timberlands.

• $15 million that would go toward maintaining the mill site and implementing the closure plan.

The matter is scheduled to be heard on Thursday.