September 24, 2014

Great Northern Paper files for Ch. 7 bankruptcy

Great Northern Paper Co., the company that had previously said it would reopen its East Millinocket mill this fall, has filed for Chapter 7 bankruptcy, with at least $50 million in debt.

The Bangor Daily News reported that GNP filed for bankruptcy in a Delaware court Tuesday — a move that will allow the company to sell and liquidate its assets in order to pay off debt to its more than 1,000 creditors listed in the filing.

The news has cast a shadow on hopes for a turnaround at the East Millinocket mill, which shut down and laid off 212 workers earlier this year, the Portland Press Herald reported. It also raises questions on the future of a proposed $140 million wood pellet plant in Millinocket, another project being managed by New Hampshire-based investment firm Cate Street Capital, which has yet to comment on the bankruptcy filing.

George Gervais, commissioner of the Maine Department of Economic and Community Development, told the BDN that the state is still looking for a new investor to run the East Millinocket mill.

GNP's filing was made just as three of the company's creditors — Hartt Transportation Systems, Lynch Logistics and Lynco Inc. — filed a petition on the same day at federal bankruptcy court in Bangor in an attempt to recoup more than $413,000 owed to them, the Bangor newspaper noted.

Last week, Northern Construction, another creditor of GNP, scheduled an Oct. 15 auction for the East Millinocket mill to collect more than $242,000 in debt. It's currently unclear how the bankruptcy filing will impact the auction.

Read more

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Report: Most of GNP's $40M investment a 'mirage'

Cate Street, GNP owe taxes, seek tax break

GNP mill's buyer: All options are open

Sales process OK'd for GNP mill

Second GNP company files bankruptcy

Maine AG seeks relocation of GNP case

Verso mill to close, lay off 570 workers


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