New York hedge fund firm Avenue Capital Group is joining forces with a Canadian insurance holding company to prop up North America’s biggest producer of pulp and paper. The manufacturer, Montreal-based AbitibiBowater, listed debts exceeding $6 billion when it filed for bankruptcy protection in April. Avenue and Toronto-based insurer Fairfax Financial Holdings agreed to a $206 million debtor-in-possession loan that may grow to $600 million, according to court documents.
Avenue and Fairfax stepped...