BANGOR, Maine — Motions that would allow the shuttered Great Northern Paper mill in East Millinocket to be sold at auction are expected to be filed next week in U.S. Bankruptcy Court, the Portland attorney representing trustee Pasquale “Pat” J. Perrino Jr. told a federal bankruptcy judge on Friday.
A hearing on the trustee’s motions, which most likely would include setting a date for an auction, has been set tentatively for Nov. 14 in Bangor. A motion that would allow payment of continued maintenance costs also will be considered.
“The ultimate goal is to sell this mill — even though it’s in Chapter 7 — as a going concern,” the trustee’s attorney, Randy Creswell, said last month.
Because the companies that own the mill filed for Chapter 7 — liquidation bankruptcy — it also could be sold for scrap.
Perrino told a media outlet earlier this week that he has received several informal bids, one of which could be used as a “stalking horse” bidder, for the proposed sale. A stalking horse is chosen before the actual auction to ensure there’s a starting bid and a willing buyer if no better bids are received.
Efforts to reach Perrino on Friday were unsuccessful.
The mill is owned by two separate entities, both of which have filed for Chapter 7 bankruptcy. GNP East Inc. owns the land and buildings at the shuttered mill. GNP Maine Holdings LLC owns the mill’s papermaking equipment.
On Friday, U.S. Bankruptcy Judge Louis Kornreich granted a motion that allows the cases to be dealt with administratively as one case but did not formally consolidate them.
GNP East filed for bankruptcy in Maine three weeks ago. GNP Maine Holdings in September filed for bankruptcy in Maryland. That case was transferred to Maine last month.
According to documents filed Oct. 31, GNP East estimated the value of its mill holdings at $16.5 million. Secured creditors are owed nearly $2.038 million. The company listed no unsecured creditors.
GNP Maine Holdings owes $65 million to its creditors but has just $28.15 million in assets, according to documents filed Oct. 3 that outlined in detail its assets and liabilities.
The money owed to companies and individuals that have secured claims either through liens or court judgments against GNP Maine Holdings 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.