EAST MILLINOCKET, Maine — A Glenburn construction company owed more than $242,000 by Great Northern Paper Co. has received a court judgment against the struggling mill owner and has scheduled an auction of the mill to recoup the debt.
Acting on behalf of Northern Construction Services of Glenburn, attorney Curtis Kimball of Bangor said he posted a public notice of an auction of the real estate and buildings owned by GNP on Friday because the paper company’s court-afforded 90-day redemption period ended without Northern Construction getting paid.
The auction enforces a mechanic’s lien placed on real estate and buildings at 50 Main St., the paper mill’s address, which was recorded on Jan. 28, said attorney Edmond Bearor, who is also handling the case. Maine Superior Court Ju stice Ann Murray ruled on May 20 that Northern Construction Services could sell the land and buildings encumbered by the lien in 90 days, according to documents filed with the court and the Penobscot County Registry of Deeds.
Kimball, who will handle the auction himself, compared the legal process to the foreclosure on a house. He called GNP’s nonpayment of the debt “truly unfortunate.”
“We all grew up with Great Northern Paper Co. and at one point it was a premier mill and employer [in the region] and we would like to see those days come back. But today is a different day,” Kimball said Wednesday.
Attempts to reach Great Northern officials, including Great Northern’s attorney, Gregg R. Frame of Portland, and GNP spokeswoman Alexandra Ritchie were unsuccessful on Tuesday and Wednesday.
The auction will be held on Oct. 15 at the offices of Kimball’s firm, Rudman Winchell of Bangor. All bidders will be required to submit a deposit of $10,000 in cash or certified funds before their bid will be accepted on any parcel, according to the public notice filed in the Bangor Daily News.
The mill’s land is valued at $1.5 million; its buildings at $15 million, according to East Millinocket tax collector Erica Ingalls. The personal property there, or equipment, is valued at $16.8 million, she said.
If Great Northern does lose the mill, the cause would be one of a string of nonpayments that have dogged the company since it was several months late with its personal property tax payments to East Millinocket in summer 2013. The company also owes back taxes to neighboring Millinocket, where it owns an industrial park.
In April, GNP was at least $6.81 million in debt to the Internal Revenue Service, East Millinocket and Millinocket, and several vendors who have sued or filed liens since February 2013. The IRS filed liens totaling $2.49 million against GNP West Inc., which manages the company’s Millinocket interests, and GNP East Inc., the corporate entity overseeing its East Millinocket holdings.
Before the IRS filings in April, vendors supplying the companies had gone to civil court or filed liens for unpaid bills totaling $1.32 million and been paid $117,587. Since April, one company dropped a $16,000 lien and Great Northern has made partial payments on its 2013-14 tax debts to East Millinocket and Millinocket, according to officials and documents filed with the Registry of Deeds.
East Millinocket selectman Mark Marston said he was “very surprised” to hear of the looming auction.
“I hope if they do sell it that this will bring forward a couple of potential partners interested in the mill,” Marston said, “and as far as I know, they [potential partners] have still been visiting the mill. I was hopeful of a start soon and I know the mill people met with some of their wood contractors this past week.”
Selectman Clint Linscott said he hoped the auction would be forestalled by a settlement. Linscott said he has been to many auctions of real estate and equipment and seen settlements pre-empting auctions at the last minute.
“I didn’t really expect much of it,” Linscott said of the auction’s legal notice. “Any buyer would assume the burden of operating the secondary wastewater treatment plant for the town, and real estate taxes. It’s a very, very expensive operation.”
The Board of Selectmen was due to meet with mill management for an update last week, but the meeting was postponed because of scheduling conflicts, Marston said. Gov. Paul LePage met with millworkers at the town office on Aug. 21 and told them that several investors are interested in buying the mill, but not with GNP management company Cate Street Capital as a partner. He also said he doubted the mill would restart before November.
“I was anticipating a startup this fall. I know if they don’t get started they have a financing plan to keep the mill heated over the winter,” Marston added.
The mill stopped producing paper in January and laid off 212 of 256 workers on Feb. 6. It issued federally mandated layoff notices to workers on Aug. 8. The Federal Workers Adjustment and Retraining Notification Act requires most employers with 100 or more employees to provide notification to workers 60 calendar days before plant closings and mass layoffs expected to last six months or more.
According to Murray’s order, Northern Construction is entitled also to attorney’s fees and interest. Surplus funds created by the auction will be held by the court for GNP, the order states.
Northern Construction did electrical, plumbing and mechanical installation and repair before filing the lien, according to a list Kimball provided. Northern Construction principal Richard Doiron did not return telephone messages left Tuesday and Wednesday.