JAY – Androscoggin Energy LLC, which filed for Chapter 11 bankruptcy protection in November, has paid about half of the nearly $2 million in personal and real estate taxes it owed to Jay for 2004-05.
Androscoggin Energy, a natural gas-fired cogeneration center, paid the second half of its 2004-05 tax bill in April, Jay Town Clerk Ronda Palmer said last week. That amount was $872,389 for personal property and $63,828.65 for the real estate, she said.
Androscoggin Energy still owes nearly $1 million for the first half of the taxes for 2004-05, which were due in October, Palmer said.
The first half of the power plant’s taxes were owed prior to the company filing a petition for Chapter 11 bankruptcy protection, Palmer said Monday. The company is responsible to keep up with taxes due after the petition date, Palmer said, and once the bankruptcy proceedings are settled, the town should get the other half of the money owed.
The Androscoggin Energy plant, which is adjacent to International Paper’s Androscoggin Mill, remains idle, Calpine Corp. spokesman John Flumerfelt said Monday.
Unless it sells steam to IP, he said, it is not cost-efficient to run the plant.
The power plant had sold steam to IP and electricity to the power market until Nov. 25, when the cogeneration center suspended operations.
Androscoggin Energy petitioned for voluntary bankruptcy protection in Maine under Chapter 11 on Nov. 26, which allows a company to resolve financial challenges such as excessive debt, in order to preserve the company’s assets. In a Chapter 11 case, a company continues to operate its business while reorganizing its finances and operations in order to meet the claims of those it owes money.
“We’re still in front of a judge and we’re working through the process,” Flumerfelt said Monday of the bankruptcy process. There is another court hearing on Monday, May 23, he said.
The company filed for bankruptcy protection for a number of reasons, Michael Fagone, an attorney for the company, said in February, including market conditions and Androscoggin Energy’s senior bank debt of about $67 million and $92 million in unsecured debt. The latter includes a disputed jury award of $41 million in damages awarded to IP in 2004. IP filed a breach-of-service-contract suit over the steam supply to its Jay mill in October 2000 in U.S. District Court in Chicago. The trial jury sided with IP in November.
Fagone said in February that Androscoggin Energy had asked the court to set aside the $41 million award, and if that didn’t happen, he would file an appeal in the 7th Circuit Court of Appeals.
Androscoggin Energy is owned by a Maine limited liability company, with Wisvest Corp. owning 66.7 percent, Calpine Corp. owning 32.3 percent, and IP owning 1 percent interest.
Comments are no longer available on this story