EAST MILLINOCKET — A court-approved auction of Great Northern Paper Co.’s real estate and buildings originally set for Wednesday will be delayed a week while a bankruptcy trustee works to untangle the mill’s complex ownership structure, officials said Tuesday.
Acting on behalf of Northern Construction Services of Glenburn, attorney Curtis Kimball of Bangor stated Tuesday in a brief email that he had agreed to the delay. The auction is rescheduled for Wednesday, Oct. 22, at the Rudman Winchell law firm office in Bangor. He declined further comment.
Attorney Randy Creswell, who represents Pasquale “Pat” J. Perrino Jr., the trustee appointed Oct. 6 to shepherd the mill through the bankruptcy process, requested the delay because he and Perrino wanted more time to become better acquainted with the case.
“The trustee’s ultimate goal is to get the mill back online, if possible,” Creswell said Tuesday. “If the real estate is separated from the rest of the mill’s property, then that makes it so much harder to do.”
Kimball confirmed on Sept. 17 Northern Construction’s plans to auction the paper mill real estate and buildings on Oct. 15 as part of an attempt to recoup about $242,000. The construction company, which according to GNP’s Chapter 7 filing is among 1,159 creditors owed a total of $65 million, was granted the opportunity to auction the mill’s real estate and buildings by a Superior Court judge in May.
The auction is not part of the bankruptcy process.
Creswell said that he and Perrino hope to find the best way to pay the mill’s creditors and restart the mill, but that is a challenging process. Both attorneys are “trying to puzzle through the assets and nonassets of this estate and to best position it to be sold to somebody who would want to come in and run the mill,” he said.
One of the case’s tangles, Creswell said, is that the mill is owned by two corporate entities operating under the umbrella of Great Northern Paper Co.
GNP Holdings owns the mill’s papermaking equipment, while the real estate and buildings are owned by GNP East, said Creswell, who called the arrangement typical of many large businesses.
The bankruptcy filing names GNP Holdings but not GNP East. The court ruling allowing the auction names both GNP Holdings and GNP East.
The trustee will try to fashion a deal that reconnects the real estate, buildings and papermaking equipment under one corporation, Creswell said.
“It could be done consensually with the entity that owns the land [GNP East] and all the stakeholders or somebody could show up at one of the auctions and try to buy the assets,” Creswell said. “You never know how it could get done but there are a number of ways it could get done.”
The trustee also will, if possible, arrange to maintain the mill’s wastewater treatment facility, which also serves the town, Creswell said.
The mill needs to be winterized before winter weather sets in. It needs to be seen by potential buyers, and the creditor claims should be addressed to the creditors’ satisfaction, before a deal can be made, Creswell said.
“I have had a lot of interest [in buying the mill] from various folks who are in this industry, including some from mill operators,” Creswell said. “There are a lot of professional organizations that will assess the value of the mill to help get somebody in there to buy it.”
Creswell said it is too early to say whether the mill would be restarted. If a buyer is not found or for any other reason the mill cannot be restarted, the trustee likely would opt to sell the mill for scrap, he said.
But whatever happens will happen quickly.
“Our goal is to present that plan pretty soon because this is the melting ice cube scenario,” Creswell said. “There is never enough time or money in bankruptcy. The concept is that you have a finite time to maximize the value of what you have inherited as a trustee.”
“Compared to any other [court] process, bankruptcy goes at warp speed,” Creswell added.
Millinocket attorney Dean Beaupain, who represents East Millinocket and its claim of about $1.3 million in delinquent real estate and property taxes Great Northern owes the town, said Tuesday he was glad that the auction was delayed.
With 256 employees, Great Northern was the town’s largest single employer, and town leaders hope that the mill could be restarted, Beaupain said. The mill stopped production in January and 212 of 256 workers were laid off on Feb. 6. Four workers and a supervisor maintain the waste treatment facility, but no one is maintaining the mill itself, a union official said Tuesday.
The layoff and tax delinquency are among several reasons why the town has a 20 percent unemployment rate and its school board is having considerable difficulty passing a budget.