HALIFAX - Creditors who say they are owed money by an idled Cape Breton paper mill have until April 16 to submit their claims.

The deadline for claims against NewPage Port Hawkesbury was set Thursday in Nova Scotia Supreme Court.

Mathew Harris of the court-appointed monitor, Ernst & Young, said all of the company's creditors will be formally notified of the deadline next week.

"The process allows us to effectively cleanse the company such that we can sell it," Harris said outside court.

"If the process wasn't there to deal with all these claims and the purchaser had to deal with them after the purchase, it would make the situation much less attractive to any purchaser."

NewPage's two paper machines in Point Tupper, N.S., have been shut down since September. Negotiations are ongoing with Pacific West Commercial Corp., whose bid to buy the mill was selected in January.

A number of steps need to be taken before the sale is wrapped up, which Harris said could take several months. He said the call for claims was the first step, followed by negotiations with the creditors.

Pacific West and Nova Scotia Power are also working towards a final agreement on power rates, which has been one of the biggest challenges in negotiating a sale.

Harris said any deal would require the approval of the Nova Scotia Utility and Review Board.

"Everybody's been working hard to try to achieve (a solution)," he said.

"We're getting very close, we believe, to being in that position. That's why it's necessary now to move the other parts of the process along."

Harris could not say how much the pending claims will be worth. However, he said pension deficiencies are estimated at $140 million and unsecured creditors could be owed some $20 million.

The mill remains in a so-called "hot idle" mode while talks continue with Pacific West. The Nova Scotia government has promised $5 million to keep the mill in the semi-ready state until April 13.

Harris said that more money will be needed after the government funding runs out. But he said the amount will drop significantly because heating costs will be lower in the warmer months.

The provincial Natural Resources Department said this week it is exploring its options relating to additional funding past April 13.

The court, meanwhile, has issued a so-called reimbursement order that could see the initial $5 million repaid to the government if the mill is liquidated. Harris said that would be a worst-case scenario.

He said if the assets are liquidated at an amount greater than the highest offer in the sales process, the additional money would be used to repay the government some or all of its original contribution.