August 19, 2018
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Workers from dead Maine paper mills call bankruptcy payouts ‘a total ripoff’

By Nick Sambides Jr., BDN Staff
Updated:

A 15-year-old bankruptcy case is finally paying out to workers whose toil made Great Northern Paper Co. the pride of the nation’s papermakers for more than a century.

About 1,000 former Great Northern workers have begun receiving checks for “a small fraction” of the pensions, vacation and severance pay that they, in many cases, spent decades earning at the company’s East Millinocket and Millinocket paper mills, bankruptcy court trustee Gary M. Growe said.

It’s a moment far more bitter than sweet for men, now at retirement age, who joined Great Northern as teens or 20-somethings expecting that mill work would provide them with an economically secure old age as it had so many of their fathers, grandfathers and, in some cases, great-grandfathers.

But Great Northern collapsed under the weight of changing times, new technologies, increasing international competition and a lack of reinvestment, filing for bankruptcy protection on Jan. 9, 2003.

“The former employees are the only unsecured creditors that are getting anything. Everybody else who is a non-secured creditor who did business with them isn’t getting any money,” Growe said. “We cannot even pay the wage claimants all that they are owed, and everybody else [among creditors] who is owed is just too far down the list.”

One retired and disabled Millinocket millworker, boiler operator Michael Manzo, had mixed feelings about the payout.

“Of course, it is good to get a little money, but it is nothing compared to what we have lost,” Manzo said Friday. “I thought there were supposed to be laws to protect us.”

“It is just a total ripoff. We spent years of our lives there. I was there about 30 years, and I was one of the younger ones, so you can imagine how it was for those who were older,” said Manzo, who is 56 and attending the University of Maine in Augusta to become a teacher. “We did a lot for this town, all of these workers. We have been here since the town was here.”

“It was really the townspeople’s mill. They might have owned it, but it was really the town’s mill ― and we always paid our bills.”

A downward spiral

Great Northern was formed in 1899 in Millinocket and built a second mill in 1906 in East Millinocket. At its height, the company’s hegemony extended over 2 million acres of timberland; several dams it owned on the Penobscot River, providing all the electricity it needed; plus farms, a hotel and several vessels.

Though the two mills were later revived following the 2003 bankruptcy by Brookfield Asset Management, to many workers, Brookfield joins a line of owners whose corporate arrogance killed the cash cows. Speculation about when the decline began is endless among the workers, but to many, the line started with the company’s 1970 merger with Nekoosa-Edwards Paper Co.

East Millinocket’s mill closed for good in February 2014 after its owner listed more than 1,000 creditors and at least $50 million in debts. Citing runaway oil prices, Brookfield closed Millinocket’s mill in September 2008.

Each mill employed a few hundred workers at the time of closure. In their prime, they had more than 3,000. Brookfield still owns the dams.

The 88-page report Growe filed with the court lists creditors who receive a sliver of the company’s remaining funds. The amounts vary wildly, but few among the unsecured creditors are getting anything close to what they are owed.

One of the most common payouts to individual workers totals $1,068.97. At full maturity, some pensions likely would have been worth six figures. Many workers have received only $345.54 during the last 15 years, according to the report.

Left with nothing

The report lists 46 pages of creditors who will get nothing. One, Casella Waste Systems, is owed $1.01 million.

“It’s not that uncommon in bankruptcy. The thing that’s uncommon is that the workers are getting anything,” Growe said.

U.S. Bankruptcy Court Judge Peter G. Cary approved Growe’s final report and request for distribution of funds on Oct. 24, according to court records. As of Sunday, Growe had mailed about 500, he said.

Some protested being left off the list.

“I worked for GNP for 33 years, three months. I retired Sept. 1, 2002, and should be on the list. I don’t understand how some people in the same situation as I can get it and some such as I can’t,” wrote one former worker identified in a handwritten note as Gaylen F. Cyr. “Please be fair in your decision and don’t overlook me and others like me.”

One former worker, Diane Reece of Millinocket, protested being in line to receive $231. Others in the same office and union were expected to get $1,608, she said.

East Millinocket Selectwoman Peggy Daigle, Millinocket’s former interim town manager, said that for many workers, the payouts are “a welcome surprise because the bankruptcy has gone on for so long.”

“We would get those periodic notices from the bankruptcy court and like a lot of people just file them,” said Daigle, whose husband, Maurice, worked at the mill. “It would be nice for this to have a period at the end of the sentence on this.”

One Millinocket worker, who asked that his name not be used, said he was unaware that he was on the list of workers to receive a payout.

“I will be glad to get it. That’s all I can tell you. I never expected to see anything out of that, to be honest with you,” said the man, who formerly worked as a boiler operator at the Millinocket mill.

“I guess it is one of these deals where you don’t really believe it until you see the check in your hands,” the man added. “You have people who had 30 or 40 years there, and they got screwed the hardest. They never got their severance pay or anything.”

“We were the fortunate ones. We rode it out to the very end,” 66-year-old Maurice Daigle said.

The Daigles say they have no idea what his retirement savings would be worth today if the company hadn’t gone bankrupt.

Life without Great Northern Paper

Maurice Daigle, who made $48,000 to $50,000 annually through much of his career at Great Northern, worked for several years after his retirement as a carpenter, handyman and tree-cutter, he said.

Now, as a volunteer, he grooms a dozen ski trails and helps maintain the clubhouse of the East Branch SnoRovers, a Katahdin-region snowmobile and ATV club. Peggy Daigle has worked as an interim town manager and volunteers as a member of several committees helping the region revive its economy.

Other former millworkers went back to school. Some are trapped by their investments in the Katahdin region, Daigle said. They have to commute for hours daily to support homes that they cannot sell at anything close to the price they paid. Some houses in the lower Katahdin region sell for a few thousand dollars despite being in good shape.

Yet at the time, the bankruptcy wasn’t much of a surprise to the company’s workers who saw the company’s assets slowly stripped away by its absentee owners, Maurice Daigle said.

“We really knew we were on a short string,” Daigle said. “When you sell your water rights, your power, you know there’s not much left. Before that, there was an inclination to hope it would continue, but we were losing a little bit more money every month.”

By then being part of Great Northern had become marrow-deep to workers like Daigle. His father and grandfather, and his wife’s great-grandfather, had worked at the mill before him, said Daigle, who was recruited straight from high school to work at the mills when he graduated in 1970.

“We went right to work. That’s how much we were needed,” Daigle said. “I thought that place would never, ever shut down. The mentality was, this place would run forever.”

That mentality once infected Millinocket and East Millinocket like a paralysis, but it is weakening. The razing of the Millinocket paper mill a few years ago, and the more recent disassembly of East Millinocket’s mill, finally convinced most of the diehards that the mills are not returning.

“Now the thoughts have to be elsewhere. They have to stop thinking about this. They have to move on,” one worker said. “They can understand it now.”

Many former millworkers “are bitter about it,” Maurice Daigle said.

“I am not. I am thankful for every day I worked there.”

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