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Bankrupt Lincoln mill claims Woodland Pulp, other Maine firms owe it $1.1 million

By Darren Fishell, BDN Staff
Nick Sambides Jr. | BDN | BDN
Nick Sambides Jr. | BDN | BDN
The Lincoln Paper and Tissue LLC mill as seen on Thursday, Dec. 12, 2013.

The bankrupt Lincoln Paper and Tissue mill plans to file $1.1 million in claims against Maine-based suppliers and others that it paid before filing for Chapter 11 bankruptcy protection.

The mill on Thursday detailed the amounts it will seek from vendors it claims should instead be part of the company’s bankruptcy case and be distributed to all similarly situated creditors.

Those payments include $552,396 that Lincoln wants back from Baileyville pulp mill Woodland Pulp. It also includes hundreds of thousands from Maine-based trucking companies, according to a court filing.

The claims are a standard part of the bankruptcy process, but set the stage for litigation or settlements between the mill and its vendors. The money from that process would go back into the bankruptcy estate for potential distribution later among the mill’s creditors.

In total, the Lincoln mill plans to seek $2.5 million back in what are called preference payments, which are generally payments it made in the 90 days before it filed for bankruptcy on debts that it incurred before that 90-day “preference period.”

The mill filed for bankruptcy Sept. 28, 2015, after the explosion of a recovery boiler that curtailed the mill’s ability to process its own wood pulp to make into paper.

[Documents show financial devastation from Lincoln mill boiler explosion]

The mill has already filed some of its preference claims against vendors, including the South Carolina-based Sonoco Products Co. and Houston-based Honeywell Process Solutions. Sonoco has operations in Pittsfield.

The other creditors include Lincoln companies Sibley Transportation, W.T. Gardner & Sons, Winn-based trucking company H.C. Haynes and the Hermon-based Pottle’s Transportation.

The Lincoln mill’s largest claim is against Woodland Pulp.

Earlier this week, the court paved the way for the bankrupt mill to begin settling some of the smaller claims without prior court approval, as long as it recovers more than 25 percent of the original claim. The mill would have to get prior court approval for any claims it made for more than $150,000.

Chief U.S. Bankruptcy Judge Peter Cary signaled support for such an arrangement during a July 24 hearing but has not given final approval to those terms outlining how settlements will move forward.

 


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