BANGOR, Maine — The towns of Millinocket and East Millinocket and the Maine attorney general have joined three Maine businesses in seeking to have the bankruptcy case of Great Northern Paper Co. moved from Delaware to Maine, where 56 percent of the 1,159 creditors are located.
Charles A. Stanziale Jr. of Newark, New Jersey, the trustee handling the case, said earlier this week that he would oppose efforts to move the case. Motions opposing the move are due Friday morning.
“I administer cases all over the country,” Stanziale said Monday. “Very few of the [bankrupt companies] are ever [physically located] in Delaware.”
A hearing on the motions for a change of venue is scheduled for 12:30 p.m. Friday in U.S. Bankruptcy Court in Wilmington, Delaware.
GNP Maine Holdings LLC, owns the East Millinocket papermaking operation that has been shuttered since Feb. 6, when a majority of the 212 workers were laid off. About 20 hourly and salaried employees have remained employed to maintain the property.
GNP filed for Chapter 7 bankruptcy Sept. 22, less than a week after three creditors — Hartt Transportation Systems of Bangor, Lynch Logistics and Lynco Inc. — filed a petition in U.S. Bankruptcy Court in Bangor that, if granted, would have forced the mill owner into bankruptcy.
Chapter 7 of the federal bankruptcy code allows the company to liquidate its assets to pay creditors. Corporations seeking to reorganize typically file under Chapter 11, though filings can be converted.
The motion filed Wednesday by attorneys for Millinocket and East Millinocket in support of the change of venue said that the towns may be GNP’s largest secured creditors with millions owed them in back taxes. The biggest concern of municipal officials is over what responsibility the company has to heat and insure the facilities and pay the taxes.
GNP Holdings owns the business and equipment but not the real estate, which is owned by other corporate entities, according to a previously published report.
The town of East Millinocket also is concerned about the continued operation of a secondary waste water treatment plant located at the closed mill. If the secondary plant does not continue to operate, water quality in the town and downstream from the Penobscot River could be negatively affected, according to the motion.
The attorney general’s motion asked that the case be moved because several state agencies are owed money by GNP. Assistant Attorney General Kevin J. Crosman, who signed the motion, also said moving it to Maine would better serve the state’s taxpayers.
“Indeed, unless GNP’s bankruptcy case is transferred to the district of Maine, where a majority of the parties are located, a significant number of Maine-based creditors and parties-in-interest would be deterred, if not completely disenfranchised, from active and meaningful participation. A de facto disenfranchisement of 56 percent of the creditors cannot be reconciled with the ‘interest of justice.’”
BDN writer Darren Fishell contributed to the report.