Biomass complex sells for $6 million

Posted March 11, 2009, at 9:53 p.m.

DEBLOIS, Maine – New York-based Prospect Capital Corp. Wednesday auctioned off its biomass plant in this Washington County town to recoup an unpaid mortgage.

With no other bidders, Prospect Capital posted the winning bid of $6 million.

Contacted Wednesday afternoon, a spokesperson at Prospect Capital said the company had no comment on the sale. Nor did the finance company’s attorney, Keith J. Cunningham of Pierce Atwood LLP of Portland, who conducted the auction.

The minimum bid was set by the company at $4.25 million

The auction was held at the plant Wednesday. About 10 people attended.

The property is known locally as Worcester Energy Co. Inc. of Maine and Worcester Energy Partners Inc. of Delaware. The company’s property includes a 22.8-megawatt biomass power plant, ancillary buildings, equipment and 20 acres of adjoining land. One of the plant workers said that the plant was shut down for the time being.

Cunningham opened the auction by going over the terms of the sale. He then asked if anyone had the necessary $500,000 deposit in order to participate. There were no takers.

Cunningham then declared that the qualified bidder was Prospect Capital Corporation and the auction was over.

“Well, that was anticlimactic,” one man commented.

As soon as the auction ended, two men and a woman later identified as wood product suppliers tried to speak with Cunningham, but he referred them to Worcester Energy Partners’ acting chief executive officer of the plant Jerry Gregory.

They went behind closed doors. When they emerged the three people declined to comment.

Gregory also declined to comment, nor would he answer questions about the size of the work force at the plant.

A notice on the employee bulletin board signed by Worcester Energy Partners Inc. President John F. Barry warned employees that they had a duty and obligation to maintain confidentiality when it came to activities within the plant. The notice also went on to talk about honesty and integrity and loyalty to the company.

Prospect’s Web site says that John Francis Barry III is the chairman of the board and chief executive officer of that company.

Portland Attorney David C. Johnson stood in the back during the auction and watched. He said later he was there representing his client, Camelot Power LLC of Portland.

Camelot Power LLC has filed a lawsuit in Superior Court in Portland asking that the sale be stopped, claiming that the transfer was fraudulent. According to court documents, Camelot provides consulting services to the electric power and energy sales business. The court case begins Monday in Portland.

“One of the things we are asking for, if we prevail, is that the various transactions that put together this whole thing be unwound,” Johnson said, “such that we be allowed to foreclose our mortgage.” He said the company owed his client more than $1 million. Camelot is not the only company to file against the company.

Davis Forestry Products Inc. of Weston has filed a $101,036 lien against the property. Last month, the District Court judge in Machias approved an attachment ordering the owners to pay Davis Forestry for the wood products Davis supplied to the biomass company.

Two other companies have also placed liens against the company

According to records in the Washington County Deeds Office, J.D. Raymond Transport Inc. of Dover-Foxcroft claims that Worcester Energy Partners owes them $138,526 and W & R Gillespie Ltd. of New Brunswick, Canada, claims their company is owed $92,949.

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