UPDATE 1-Canada's Fraser Papers files for bankruptcy

* Says hurt by continued oper losses, weak demand, prices

* Brookfield Asset Management to provide DIP financing

* Co to get $20 mln funding during reorganization

* To seek relief under Ch.15 of U.S. Bankruptcy Code

June 18 (Reuters) - Canadian speciality paper company Fraser Papers Inc (FPS.TO: Quote, Profile, Research) said it along with its subsidiaries filed for bankruptcy protection in an Ontario court amid continued operating losses, weak demand and lower selling prices for pulp and lumber.

Fraser also cited impending debt repayments and significant pension funding obligations and said it continues to pursue alternatives to restructure its operations.

The company said it will also seek protection from creditors under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.

"The filing will provide Fraser Papers with a defined process and the necessary time to restructure its affairs in order to emerge with a sustainable and profitable specialty paper business," Chief Executive Peter Gordon said in a statement.

CIT Business Credit Canada agreed to continue to revolve the existing working capital facility and, Brookfield Asset Management has agreed to provide debtor in possession (DIP) financing, Fraser said.