NOVA SCOTIA (From news reports) -- A B.C. Supreme Court justice has authorized the process that will ultimately lead to the sale of the Nova Scotia timberlands, Crown land leases and a nursery controlled by Northern Pulp.

Justice Shelley Fitzpatrick approved a $104-million baseline bid for the assets by Macer Forest Holdings following an hour-long hearing on Thursday.

Macer's bid, known as a stalking horse agreement, positions the Ontario-based company to pick up the assets from the failed Pictou County pulp mill unless other interested parties come forward.

If other bidders are identified by Nov. 20, an auction would be held using the stalking horse price as the starting point. Bids would be required to increase by increments of at least $200,000. If Macer is not successful at auction, it would receive compensation of up to about $3.1 million.

Thursday's step, a continuation of the company's creditor protection process, followed news last month that Northern Pulp would not pursue construction of a new mill in Liverpool, N.S., after a study determined such an operation could not generate a high enough rate of return.

No guarantee of money for site cleanup

Proceeds of the asset sale are to go toward Northern Pulp's debts, including money its parent company, Paper Excellence, has lent it for the creditor protection process, the cost of winding up company pension plans and some of what is owed to the Nova Scotia government for previous loans.

Although there is also supposed to be $15 million that would go toward implementing a closure plan for the former mill site at Abercrombie Point, court filings have stated there may not be enough money left over after other debts are settled, forcing Northern Pulp to declare bankruptcy.

Indeed, the stalking horse bid does not appear large enough to leave anything for the closure plan, although an auction would result in more money being available.

A spokesperson for the Nova Scotia Environment Department confirmed on Thursday that Northern Pulp has not submitted a reclamation plan.

Fitzpatrick also agreed during Thursday's hearing to extend Northern Pulp's creditor protection until Dec. 19, at which point officials involved in the process hope the asset sale will be complete.