PORTLAND, Maine — The estate of the bankrupt Great Northern Paper has filed claims against a number of past vendors of the shuttered paper mill, in line with federal bankruptcy rules that allow estates to claw back certain payments.
In two such cases, the GNP estate has asked a bankruptcy judge to approve settlements for a fraction of its claims against the New York-based Paetec Communications and National Corporate Research, which serves as a registered agent for corporations.
The settlement calls for Paetec and National Corporate Research to pay $3,500 into the estate, which would be available to the mill’s creditors, including $42.3 million to secured creditors and $22.6 million to lower priority creditors.
The settlements come as the estate also is pursuing the return of $10,539 from Millinocket’s Levasseur’s Hardware and Building Supplies and $13,500 from the Bangor branch of Fortune Personnel Consulting, which specializes in recruiting for the pulp and paper industry and others, according to its website.
GNP’s estate is pursuing return of those payments according to bankruptcy rules that provide for recovery of certain “preference payments” made within the 90 days before a bankruptcy filing. The same happened during the mill’s prior bankruptcy in 2004, with claims in the tens of thousands landing in the mailboxes of vendors.
The estate’s attorneys wrote they began that after investigating claims against company insiders, directors, officers and lenders, which resulted in a $1.34 million settlement for the estate.
The settlement avoided litigation over claims the estate wrote that it could bring for mill managers violating their fiduciary duty by allegedly operating the company close to insolvency while continuing to take on additional debts and “overpaying significantly” for the acquisition of mill equipment from its affiliate, GNP East.
The estate filed its claims against Levasseur’s, Paetec and National Corporate Research in May. It filed the claim against Fortune Personnel Consulting Bangor in mid-June and said in its settlement proposal with Paetec and National Corporate Research that it has settled most of such claims.
In a response June 15, the East Millinocket-based attorneys for Levasseur’s disputed that the payments qualify as preference payments and asked the court to dismiss the $10,539 in claims.
The court has scheduled a hearing on the proposed settlement with Paetec and National Corporate Research for Aug. 16, according to court records.