Black Diamond to buy White Birch Paper

BD White Birch Investment, which is backed by Black Diamond Capital Management, has submitted the highest and best offer for the White Birch Paper Company. White Birch Paper Company is the second-largest newsprint manufacturer in North America. White Birch expects approval for the sale at hearings in Canada and the U.S. on September 24 and 30, respectively.

PRESS RELEASE

White Birch Paper Company (“White Birch” or the “Company”) and its subsidiaries today announced that BD White Birch Investment, LLC (“BD White Birch”) has submitted the highest and best offer for the Company’s operations at an auction held on September 21. Funds managed by Black Diamond Capital Management, L.L.C. and its affiliates are the majority owners of BD White Birch, with Caspian Capital Advisors LLC also participating as equity owners. White Birch expects to seek final approval of the sale at hearings in Canada and the U.S. scheduled for September 24 and September 30, respectively.

White Birch indicated that operations will continue as normal during the sale process. If approved by the Courts, the sale is expected to be completed in late November 2010, subject to certain regulatory approvals and other conditions.

Information about the White Birch restructuring is available at the Company’s website, www.whitebirchpaper.com or via the Company’s restructuring information line at (888) 232-0287.

About White Birch: White Birch is the second largest newsprint manufacturer in North America, with operations in both Canada and the United States.

About Black Diamond Capital Management: Founded in 1995, Black Diamond Capital Management, L.L.C. (Black Diamond) is a leading alternative asset management firm with over $5 billion in assets under management across complementary control distressed/private equity, hedge fund and CLO vehicles. Black Diamond has offices in Greenwich, CT and Lake Forest, IL.