Tax Bill Looming

A $250-million loan between Canadian and U.S. subsidiaries of AbitibiBowater is forcing the company to juggle its corporate structure to avoid a big tax bill.

The Montreal-based company, which is operating under court protection from creditors, faces a more than $55-million withholding tax in Canada, and potentially more in the United States, unless it is able to repay an inter-company loan this year.

In court documents filed last week, the U.S. holding company AbitibiBowater US Holding LLC says it "does not have sufficient funds" to repay the $200-million loan.