The private firm that leveraged $16 million in public money for its failed restart of East Millinocket’s Great Northern Paper Co. mill has filed for bankruptcy.
The Portland Press Herald reports that in its federal bankruptcy filing, Cate Street Capital listed its assets as slightly more than $200,000 in cash and said it owes more than $800,000 in legal bills and potentially $2.8 million to a Massachusetts company for natural gas and equipment provided to the Maine mill. The natural gas company is seeking its money in New Hampshire state court, alleging that Cate Street never paid what it owed.
The eventual bankruptcy of Great Northern left behind a trail of debt that the attorney overseeing the case attributed in part to mismanagement, as managers at Cate Street inked unfavorable deals with related companies plunged the company into more debt and despite clear signs that it was out of cash.
An investigation by the Maine Sunday Telegram into Cate Street’s deal also prompted state and federal regulators to close loopholes in incentive programs that Cate Street used to deliver roughly $16 million in Maine tax dollars to out-of-state financiers, for investments that didn’t improve any part of the East Millinocket mill.
The East Millinocket mill closed in February 2013, laying off 212 of 256 workers and devastating the Katahdin region economy. The mill made newsprint and telephone directory-grade paper. Its closure ended more than 100 years of international papermaking success in the Katahdin region. The Millinocket mill, which was part of a property Cate Street also bought, closed in 2008.
Another, later Cate Street venture ended incomplete when St. Joseph’s College and a company that Cate Street backed, Organic Nutrition Inc., ended a partnership in 2018 to develop a hydroponic greenhouse on the college’s Standish campus after all partners involved agreed that the partnership was a bad fit. Hydroponics is a method of growing produce without soil, often in nutrient-rich water.
In the filing, Cate Street lists a Florida address, but it had conducted most of its operations from New Hampshire. It filed for Chapter 7 bankruptcy, under which the company is dissolved, rather than Chapter 11 bankruptcy, which is used when a company reorganizes and restructures its debt and continues to operate, the Press Herald reports.