BANGOR, Maine — A federal bankruptcy judge on Friday approved the $10.5 million sale of the Old Town mill to Expera Specialty Solutions, a Wisconsin firm that intends to restart the mill and put about 200 people back to work.
“It’s done,” Jim England, a 35-year veteran millworker at the defunct Old Town Fuel & Fiber, said in an email to his fellow furloughed employees just after U.S. Bankruptcy Judge Louis Kornreich approved the sale.
“We’ll see people trickle back in over the next few weeks,” said England, who has played employee middleman helping co-workers with unemployment, health insurance and other issues since the shutdown.
There are 30 people already working to winterize and maintain the facility that has been operating on the Penobscot River for more than a century and a half, he said.
“They’re going to have to wash the recovery boiler, and we’ll need chemicals [to make pulp],” England said. “They’re bringing back some guys next week in the wood yard, and they hope to have everybody back by the 27th.”
In a press release issued Saturday, Expera said “employees will be coming back to work in several phases throughout the month of December, reaching full employment capacity by Jan. 5.”
“We’ve worked out a labor agreement … and no wage concessions were requested by the buyer, and benefits will remain at the same levels — it’s a very equitable labor agreement,” Duane Lugdon, United Steelworkers Union international representative for Maine, said after the sale was approved.
Expera Specialty Solutions created the company Expera Old Town LLC to purchase and run the facility. The newly formed company purchased the buildings, the mill equipments, personal property such as trucks and office equipment and the land on which the mill is located from Patriarch Partners.
“I’m excited to welcome the Old Town employees back to work and to the Expera family,” Russ Wanke, CEO of Expera, said in the press release. “Expera is a financially strong enterprise with an excellent platform positioned for expansion and growth. Under Expera, Old Town will have significant top-line stability and will benefit from our commitment to continuous improvement and manufacturing excellence. Old Town provides Expera with added internal capabilities, allowing us to deliver to our customers more product innovation and even better service.”
The Wisconsin firm owns four mills in that state located in Mosinee, De Pere, Rhinelander and Kaukauna, where the company is headquartered, according to information on its website. Kaukauna is located 20 miles south of Green Bay.
Expera Specialty Solutions was formed last year, when KPS Capital Partners purchased Thilmany Papers and Wausau Specialty Paper. The company makes bags for microwave popcorn, wine labels, candy wrappers and other specialty papers but is short on pulp and must buy it on the open market, according to previously published reports.
While details have not been released, it appears the Old Town mill will ship dried bails of pulp to Wisconsin by rail and truck.
“This is a great thing for workers in the entire region,” Lugdon said.
The sale was announced Nov. 11, a month after creditors forced Old Town Fuel & Fiber into bankruptcy.
“This is an extraordinary accomplishment that works for benefit of all,” Kornreich said Friday of how quickly the deal was finalized.
The closing took place immediately after Kornreich approved the sale.
The deal includes about $817,000 for employee vacation time and paid time-off claims, and also about $1.1 million in past due property taxes, which does not include what is owed in personal property taxes to the city.
The bankruptcy sale also calls for Expera to pay $3.2 million in debts and pay another $7.3 million in cash that would be split among secured and unsecured creditors.
As part of the sale agreement, Kornreich approved $300,000 for unsecured creditors and excused Patriarch for any additional debt liability as part of the deal.
Bankruptcy trustee P.J. “Pat” Perrino, who previously objected to the deal because its terms did not set aside enough money for unsecured creditors, withdrew his objection Friday so the sale could go forward.
Tom Brown, an attorney for the Old Town Water District, asked Kornreich for some assurance that a past due bill for $67,000 would be paid as part of the mill’s sale, but the judge said the district must line up with everyone else claiming they are owed money.
Brown said that Expera, as a new customer, will be asked to pay a $25,000 deposit for water.
The same bankruptcy judge approved the bankruptcy sale of the Great Northern Paper bankruptcy on Tuesday to Hackman Capital Partners, a California firm that successfully bid $5.4 million for the shuttered East Millinocket mill.
“We left from [the GNP bankruptcy sale] terribly disappointed,” Lugdon said Friday. “This does feel good.”