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September 18, 2014

GNP's East Millinocket mill up for auction

Great Northern Paper Co.'s mill in East Millinocket has been scheduled for auction as a result of a court judgment granted for a creditor that is owed more than $242,000.

The Bangor Daily News reported that an attorney for Glenburn-based Northern Construction Services posted a public notice for the auction of GNP's property at 50 Main St. because GNP had yet to pay the company back within a 90-day redemption period. A Maine Superior Court justice ruled in May that the company could sell the property in an attempt to recover the debt.

The auction is scheduled for Oct. 15 at the Bangor offices of Rudman Winchell, the law firm representing the construction company. East Millinocket's tax collector said GNP's land is valued at $1.5 million, its buildings at $15 million, and its personal property at $16.8 million. Curtis Kimball, the attorney representing Northern Construction Services, likened the auction to the foreclosure of a house, calling GNP's lack of debt payments "truly unfortunate."

The auction raises questions about the future involvement of Cate Street Capital, the New Hampshire-based investment firm that manages GNP and had previously said that the East Millinocket mill would reopen this fall, after halting operations and laying off 212 workers earlier this year. GNP has been faced with millions of dollars of debt to the Internal Revenue Service, East Millinocket and Millinocket and several vendors.

East Millinocket Selectman Clint Linscott told the newspaper a "couple of potential partners" are interested in purchasing the mill. The BDN noted that Gov. Paul LePage has said that several investors are eyeing a purchase of the mill, though not with Cate Street involved.

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