BANGOR (AP) – An investigator may be asked to go through 700 boxes of financial records to determine whether the former Great Northern Paper Co. was insolvent in May 2001, a year and a half before it filed for bankruptcy.
The answer will help to shed light on whether land transfers in June 2001 between Great Northern and its parent company, Inexcon Maine, were legal.
At issue in U.S. Bankruptcy Court is $3.2 million in loans to Inexcon Maine and its owner, Lambert Bedard, which were secured with the transferred land.
If fraud is proven, a trustee for the bankrupt estate would try to convince a judge that Katahdin Federal Credit Union is not entitled to be repaid $3.2 million from the land transfers.
“There’s an element that we would have to prove for a fraudulent transfer. It’s insolvency,” said David Sherman, a lawyer who represents the trustee.
The payment would instead come from the proceeds of the $103 million sale of Great Northern’s assets in late May.
The trustee for Great Northern’s estate last week filed an application in Bankruptcy Court to hire a forensic accountant from Portland, R. Steven Thing, to go over Great Northern’s financial records.
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