Red Shield buyer awaits bankruptcy judge’s OK

Posted Oct. 22, 2008, at 9:07 p.m.
Last modified March 20, 2011, at 6:17 a.m.

The sprawling Old Town pulp and paper mill that once employed hundreds of area residents has once again been sold, although the identity of the buyer and sale price will not be disclosed until today.

Bob Keach, an attorney representing Red Shield Environmental LLC, confirmed Wednesday that the pulp manufacturing facility had been sold during an auction Wednesday. The minimum bid for the plant was expected to be $11.5 million.

“We do have a bidder, and we will present it to the court tomorrow,” Keach said Wednesday evening. A judge at the U.S. Bankruptcy Court in Portland must approve the winning bid.

“Overall, we are pleased,” Keach said. “We are pleased to have somebody buy the mill who is going to operate it and put people back to work.”

Wednesday’s auction was the latest twist in what has been a turbulent few years for mill workers and their families as well as Old Town’s government and business community.

About 400 workers lost their jobs in May 2006 when Georgia-Pacific Corp. officially shut down the mill. The closure came after state officials worked with G-P officials several years earlier to put together an economic plan to save the mill, which had operated in Old Town for more than a century.

A group of investors working under the Red Shield name purchased the mill in September 2006 in hopes of reinventing the facility. Red Shield later brought in RSE Pulp & Chemical LLC to operate the mill and received a $30 million grant from the U.S. Department of Energy to work with the University of Maine on a pilot ethanol production plant.

But the facility was idled in June due largely to rising materials and fuel costs. The grant money couldn’t be used to address the cash-flow situation or to replenish the company’s supply of wood chips.

Red Shield and RSE Pulp & Chemical filed for Chapter 11 bankruptcy soon thereafter, laying off about 160 employees. Attempts to restart the facility have failed.

Keach said he could not reveal any other details about the winning bidder before filing the information with the bankruptcy court.

Representatives for Red Shield and the mill workers’ union representatives could not be reached for comment.

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