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Bankruptcy Judge Signs Off on Old Town Mill Sale to Wisconsin Firm

Courtesy: Old Town Fuel and Fiber
The Old Town Fuel and Fiber mill.

It's been a tough week, in a tough year, for Maine's paper industry. But today brought a bit of good news.

In Bangor this morning, a U.S. bankruptcy judge signed off on a Wisconsin company's agreement to buy the idle Old Town Fuel and Fiber mill. Expera Specialty Solutions will acquire the mill for $10.5 million. The deal means roughly 200 workers will soon be back on the job.

Those workers learned back in mid-August that they were being laid off. At the time, the mill said it was being forced to close up shop immediately, due to high wood and energy costs. In October, four creditors petitioned to force Old Town Fuel and Fiber into Chapter 7 bankruptcy to recoup some of the mill's nearly $10 million in debt. But the following month brought some good news from the Midwest.

"This is a big Christmas gift to the people who work at Old Town mill," said Pat Perrino Jr. Today, at a little after noon, Perrino Jr. walked out of the federal courthouse in Bangor with a team of happy lawyers.

Perrino Jr., the bankruptcy trustee in this case, was in court this morning, as a U.S. bankruptcy judge approved a November deal to sell the Old Town mill to a new owner. Expera Specialty Solutions, which already owns four paper mills in its home state of Wisconsin, is buying Old Town Fuel and Fiber for $10.5 million.

"In bankruptcies, you never have any preconceptions," Perrino Jr. says. "But we were pretty well confident that this one was going to go. There were a lot people that were interested in this case. Ultimately, we had the buyer/operator in this case, unlike the Great Northern case."

Earlier this week, Perrino Jr. presided over an auction where a Los Angeles-based investment firm bid $5.4 million to acquire the paper mill in East Millinocket. That company, Hackman Capital Partners, a company that buys and sells large industrial equipment, has not committed to pursuing paper-making at that facility.

For the industry, the news is much more hopeful in Old Town. Duane Lugdon is with the United Steelworkers International Union. "Now, today, the ownership transitions," he says. "And we are going to expect that the mill will be re-supplied with things like chemicals and wood chips and that sort."

A spokesperson with Expera was not available to comment on this story by airtime. But in past statements, the company has said it plans to resume making paper in Old Town soon. Lugdon says a handful of employees have been inside the mill for a few weeks now, taking care of the equipment and getting a boiler up running.

"And by the end of December, we will have everybody back who left in August and we will get the mill started up," Lugdon says.

Of the $10.5 million purchase price, $7 million will go to Old Town Fuel and Fiber's parent company, Patriarch Partners, to pay for the mill, the land it's located on and all its physical assets. Some $3.2 million will go to pay off Patriarch's secured creditors, and another $300,000 will go to unsecured creditors.