The federal antitrust settlement allowing Verso Paper’s acquisition of competitor NewPage to move ahead could complicate efforts by the machinists’ union representing workers at Verso’s recently closed Bucksport paper mill to stop its sale and return the mill to papermaking.
But the attorney for the union said their effort to stop the sale based on antitrust concerns will continue as planned.
“This is not just shutting mill, this is an attack on a town, and we do not want to see our people losing these job opportunities,” said Kimberly Tucker, a Lincolnville-based attorney for the local chapter of the International Machinists and Aerospace Workers union.
In its fight over severance pay, the union also has asked a federal court for an injunction to stop Verso’s sale of the Bucksport mill, alleging the company’s sales agreement with a scrap dealer derives from a scheme to reduce papermaking competition that also involves mills in Wisconsin and Minnesota.
An attorney for Verso did not return a request Wednesday afternoon for comment on the settlement’s effect on the case.
The union’s complaint details eight allegations of antitrust violations in connection with Verso’s pending sale of its property to AIM Development. For allegations of federal antitrust violations to win in court, the unions will have to convince a judge that the Department of Justice’s Antitrust Division was wrong, at least in part, to approve a Verso-NewPage settlement.
One section of the federal regulators’ statement on the settlement could make that challenge more difficult.
“Verso contemplated closing the mill before it decided to merge with NewPage,” the Department of Justice statement indicates. “The United States does not allege the closing of the Bucksport mill is a result of the merger.”
But Tucker said she thinks the Department of Justice’s decision was too narrow in looking at the Bucksport mill sale and has asked the U.S. District Court in Maine to consider that AIM’s purchase and demolition of Verso’s former Sartell, Minnesota, paper mill and NewPage’s Kimberly, Wisconsin, mill are part of a larger scheme to reduce competition in the industry.
The unions do allege a connection between the Bucksport sale and NewPage and Verso’s ultimate merger plans, Tucker said, and are asking a federal judge in Maine to investigate further, alleging that internal communications would show that “Verso and NewPage unlawfully agreed to shut down and sell the Bucksport mill to a nonpaper manufacturer in order to make the pending NewPage acquisition more attractive economically to Verso,” adding that both companies have scrapped mills in Sartell, Minnesota, and Kimberly, Wisconsin.
In addition to filing the complaint, parties interested in a return of papermaking to the Bucksport mill allege that there’s at least one buyer interested in operating the mill to make paper.
Rosaire Pelletier, a forest products specialist with the Maine Department of Economic and Community Development, confirmed to the Bangor Daily News late Tuesday that state officials believe a separate party is interested in buying and operating the mill. At this point, he said, that likely would require AIM agreeing to resell the papermaking facilities.
“This mill should not be put on the scrap heap as long as there is a willing buyer who wants to operate it in the coated paper market,” Tucker said.
Verso and AIM have said they expect to close the deal on the Bucksport property in January.
In its complaint, the union argues the company cannot justify the shutdown for the sake of improving efficiency.
“Even if Verso could offer an ‘efficiency’ justification for its action to close Bucksport, its subsequent action in selling the Bucksport mill to a salvage company rather than a competitor willing to continue to operate the Bucksport mill as a paper-manufacturing facility, destroys any such justification and makes the original shutdown understanding with NewPage clear,” the complaint reads.
Four of the union’s antitrust complaints deal with federal law and another four with state law.
Verso has not yet replied in full to the union’s antitrust allegations in that case, saying only in a Dec. 22 response that “Verso will demonstrate in future filings that [the union’s] antitrust claims are wholly without merit.”
A hearing on the antitrust claims is scheduled for 1 p.m. Tuesday Jan. 13, in U.S. District Court in Bangor.
The company has not yet filed its response in the case where the Machinists’ Union and Steelworkers Union are at odds over an agreement the state negotiated over severance pay for the more than 500 workers laid off from the mill.