BANGOR, Maine (AP) – An agreement has been reached on a dispute over a landfill used in the operation of the Great Northern Paper Inc.’s mills that had threatened to snag the company’s pending sale.

Great Northern and Inexon-Maine have reached an “agreement in principle” that puts an end to a lawsuit over the landfill and puts the sale of Great Northern back on track to be completed by April 21.

The agreement was announced during a status report on the progress of the sale to Brascan Corp. of Toronto that was delivered Thursday to U.S. Bankruptcy Judge Louis Kornreich. The agreement was expected to be signed Monday.

The agreement calls for Inexon-Maine to return the Dolby landfill in East Millinocket to Great Northern. Brascan officials had considered the return of the landfill an absolute condition of its acquisition of Great Northern’s assets.

The settlement came after 11 hours of mediation talks on Tuesday with U.S. Bankruptcy Chief Judge James Haines in Portland and three separate closed-door meetings on Wednesday.

“Ultimately we were able to reach a resolution,” Daniel Bleck, a Boston attorney representing Great Northern, told Kornreich. “The property will come back into the estate.”

Brascan Corp. received approval from Kornreich last week to purchase Great Northern mills in Millinocket and East Millinocket for $103 million. However, Brascan said it would withdraw its purchase offer if it didn’t acquire rights to the landfill.

But Lambert Bedard, a principal of Inexon Maine, said he wouldn’t give up control of the landfill unless he were paid for it.

In a lawsuit filed last month, Inexcon Maine and Bedard were accused of improperly taking possession of Great Northern property and breaching their fiduciary duties as overseers of the company.

In June 2001, Great Northern’s board of directors voted to transfer to Inexcon Maine Great Northern’s “guest house,” the Dolby landfill, wood chipping scales, Hillcrest Golf Course in Millinocket and an airport hangar at Millinocket’s airport.

The lawsuit, filed by attorneys hired by Great Northern’s new chief executive officer, Jim Giffune, claimed that Bedard and possibly others conducted a “wrongful and improper scheme” to transfer the land so that Bedard and Inexcon Maine could obtain $3 million in loans from Katahdin Federal Credit Union in Millinocket.

According to terms of the agreement reached this week, Inexcon Maine and Bedard will transfer all of the properties back to Great Northern. Once returned, Great Northern will retransfer the airport hangar to Inexcon Maine.

Inexcon Maine also will be paid 30 percent of a six-year $1 millionpromissory note that is part of Brascan’s payment to buy Great Northern, according to the agreement.

Great Northern also agreed to drop its against Inexcon Maine and Bedard.

Nicholas Walsh, a Portland attorney representing Inexcon Maine, said Bedard wanted to reach a settlement to avoid derailing the Great Northern sale to Brascan.

“We did this becaue we care about he people of Millinocket and East Millinocket,” he said.

Jacob Manheimer, a Portland attorney representing Brascan, said that Brascan expects to close the sale by April 21 as required, but that the sales agreement allows the deadline to be extended to April 30 if necessary.

“Things are on track (for April 21),” Manheimer said. “We’re making progress, checking conditions off the list.”

AP-ES-04-04-03 1337EST

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