MILLINOCKET, Maine — The auctioneer handling last week’s sale of Great Northern Paper Co. equipment will likely pay Great Northern Paper’s overdue $2.24 million property tax bill by the end of the week, officials said Tuesday.
Town Manager Peggy Daigle had hoped to have the money at the end of the auction on June 17, but auctioneer Koster Industries is continuing to collect proceeds from vendors. The vendors include some Asian businesses arranging currency exchanges and others paying for purchased goods in installments, said Daigle and the town’s attorney, Rob Crawford of Portland.
“I am no expert with auctions, but as I understand it, this is not unusual,” Crawford said Tuesday.
Koster and Great Northern Paper have assured town leaders that none of the auctioned property will leave the Katahdin Avenue industrial park until the town is paid, Crawford said.
Koster will be handling the payment of auction proceeds “once purchasers’ agreements are finalized and funds are received,” said Alexandra Ritchie, spokeswoman for Great Northern Paper’s management company, Cate Street Capital.
Daigle estimated on Thursday that about $3.58 million in papermaking equipment at the Great Northern Paper industrial park was auctioned. Great Northern Paper, the town’s largest single taxpayer, and Koster declined to confirm the amount raised but said it would cover the company’s property tax debt to the town.
“There are some foreign investors who have bought large amounts of equipment,” Daigle said Tuesday. “It has taken a little bit longer than we are comfortable with, so we have to bide our time a little bit.”
The equipment included the No. 11 paper machine, which auction attendee and Millinocket Town Councilor John Raymond said sold for $2.5 million. Koster and Great Northern Paper declined to comment whether the machine was sold.
According to a 2004 BDN article, the No. 11 machine had been refurbished for an estimated $125 million a few years earlier.
The agreement among Great Northern Paper, the town and Koster states that the Internal Revenue Service would receive 15 percent of all sales, and Koster would receive 10 percent. That should leave about $2.68 million, enough to end Great Northern Paper’s tax dispute with Millinocket, Daigle has said.
As the auctioneer, Koster would be liable for any property removed from the industrial park or not paid for by purchasers, Daigle said.
Millinocket filed a lien against Great Northern Paper on May 21. The Uniform Commercial Code lien, filed with the Maine and Delaware secretaries of state, includes $2,171,333 in unpaid property taxes and $76,428 in interest and filing costs Great Northern Paper West owes.
The IRS filed liens in April totaling $2.49 million against Great Northern Paper companies in Millinocket and East Millinocket for nonpayment of corporate income taxes.
Millinocket Town Council Chairman Richard Angotti has said the town would re-apply the lien town officials retracted to allow the auction if the payoff doesn’t come. Daigle said she would confer with Crawford on that process later in the week.
Without the Great Northern Paper payment, the town faces grave financial problems. It would have enough of a reserve fund balance to pay its bills until mid-July, although some recent state aid disbursements would lengthen that timeline, Daigle said.