BANGOR, Maine — A few of the more than 1,100 creditors owed more than $65 million by the owner of the East Millinocket paper mill got to question former mill officials about what assets the mill has to sell to get creditors some of their money back.
The Wednesday morning meeting was held in a courtroom of the historic Penobscot County Courthouse in Bangor, but there was no court involvement. The meeting was only intended to allow the trustee of the shuttered mill and its creditors to question mill officials about their assets and liabilities — part of the bankruptcy process.
Sam Anderson, an attorney representing the towns of East Millinocket and Millinocket, asked the mill’s former finance director to provide an itemized breakdown of the roughly $10.5 million in machinery and equipment assets listed by GNP. He wanted a better picture of what the mill claimed as property and what it claimed as equipment, as well as an idea of what assets it paid taxes on to the communities.
Others sought clarification on what group is responsible for the mill’s wastewater treatment facility. Two separate groups, GNP Maine Holdings and GNP East, have filed for bankruptcy. Holdings owns the bulk of the mill’s contents and equipment, while GNP East owns most of its buildings. There is an effort underway to join those two cases as one, simplifying the bankruptcy and sale process, according to Attorney Pasquale “Pat” J. Perrino Jr. of Augusta, the mill trustee.
GNP Maine Holdings LLC filed for Chapter 7 bankruptcy last month in Delaware, where the firm was incorporated. The mill ceased operations in February.
Perrino notified the group of about a dozen attorneys in the room representing groups owed money by the company that two parties are showing serious interest in purchasing the mill. A few others are “tire-kickers” who have made inquiries but likely won’t be serious candidates, he added.
East Millinocket Selectman Mark Marston and other representatives of the town, former mill employees, as well as representatives of smaller creditors, also attended Wednesday’s meeting. After the meeting, Marston approached Perrino and expressed concern that equipment will freeze if the facility isn’t at least partially heated this winter, drastically reducing the likelihood the mill will be sold for a decent price or be reopened to workers, among other problems.
Perrino shared that concern, saying that heat is one of his most immediate concerns. However, that will require funding that likely will need to be acquired from one of the mill’s more invested secured lenders, which would have an interest in keeping the mill facilities and equipment in a saleable condition. If the mill is sold, it’s more likely they’ll recover their earlier investments.
Once the sale price is determined, Perrino said he’ll have a better idea of which creditors could expect to see how much money might be returned to them.
Perrino said he hopes to secure funding to heat the mill by sometime next week.
Bankruptcy filings indicate that the company that owns the East Millinocket paper mill owes $65 million to its creditors but has just $28.15 million in assets.
The money owed to companies and individuals that have secured claims either through liens or court judgments totals $42.34 million, including $20 million owed to Stonehenge Community Development of Baton Rouge, Louisiana, and $20 million to Enhanced Capital New Market Development Fund of New Orleans, Louisiana, which hold mortgages on the mill.
Unsecured creditors are owed $22.6 million. The company listed nearly $117,500 in accounts receivable in its bankruptcy filings.
BDN reporter Judy Harrison contributed to this report.
Follow Nick McCrea on Twitter @nmccrea213.