PORTLAND, Maine — The new owner of power generation assets associated with the shuttered Bucksport paper mill filed for Chapter 11 bankruptcy protection Tuesday, citing $15 million in disputed debt to energy giant GE International.
The company, Bucksport Generation LLC, listed between $10 million and $50 million in both debt and assets.
A representative from majority owner AIM Development LLC told union and town officials that the power generator will continue to operate with 12 employees under a union contract through the reorganization.
Sue Lessard, Bucksport’s town manager, said a company representative told her Tuesday that the bankruptcy won’t affect AIM’s workforce or redevelopment of the adjacent paper mill it purchased from Verso Paper Corp.
“It’s only related to the gas-fired generation portion, which is a separate entity from the mill proper,” Lessard said.
The generation company was sold with the mill to the Canadian scrap metal firm AIM Development, which continued to operate the power plant assets through outside contractor Energy Advisory Partners.
Bucksport Generation LLC previously operated under the name Verso Bucksport Power LLC, when it was owned by Verso.
A representative from AIM was not immediately available for comment.
Lessard said she does not expect the filing will have an effect on town finances, based on what she had heard from the company Tuesday.
She said the property is not subject to any tax increment financing agreements and that the portion of its taxes due for the first half of the fiscal year have been paid. The town allows for payments of taxes due by the end of the fiscal year to be paid in installments, Lessard said, and the power generator will owe another $572,935 to cover January through June.
“All we have to go on is what we’ve been told that the purpose of this is, and that after the emergence from [Chapter] 11 that it will be a viable portion of our valuation base,” Lessard said.
She said that such a phone call about a bankruptcy “isn’t the high point of anybody’s day” but that she’s hopeful the reorganization will be “as expedient a process as possible.”
The company did not file detailed schedules of its debt or secured creditors and the nature of its dispute over debt claimed by GE International was not clear.
Lessard said company officials told her the reorganization would allow the power generator to rid itself of some issues it inherited in the purchase.
Duane Lugdon, head of the United Steelworkers Union that represents the power generation facility’s 12 employees, said he doesn’t expect changes to the power generator’s operations.
“They’ve told us that there won’t be any change in the operations there,” Lugdon said.
The power plant had provided electricity to the adjacent mill formerly owned and operated by Verso Paper. Under AIM’s ownership, the generator sought to sell all its electricity into the New England market.
The company owns 118.4 megawatts of steam turbine generation capacity and a 72 percent stake in a 185 megawatt gas turbine cogeneration facility.
Unfavorable fuel prices led the company to lay off about 20 workers in April, leaving 12 employees to run the power generation facilities.