EAST MILLINOCKET, Maine - The financially-troubled Great Northern Paper Company today filed for Chapter 7 bankruptcy, as the company faces increasing pressure from creditors. Under the federal bankrupcy code, Chapter 7 allows for liquidation of assets, and distribution of proceeds to creditors.
Reached by phone this afternoon, Great Northern President Ned Dwyer declined to comment on the filing in a Delaware court. But George Gervais, commissioner of the state’s Department of Economic and Community Development, says he remains committed to finding a way to keep the mill alive.
"It just strengthens our resolve to find an investor, someone to carry on with Great Northern Paper and bring that region back to prosperity," he says. "We're not going to take our eye off that prize."
But creditors are also keeping an eye on the prize, and, according to the Bangor Daily News, have filed a petition in federal bankruptcy court in Bangor to force the company into involuntary bankruptcy. The town of East Millinocket has also been talking about placing a lien on the company, as pressures from other creditors have mounted.
Still, East Millinocket Selectman Mark Marston says he's hopeful that an investor can be found, or the company can reorganize. But he says the town also has to protect taxpayers. "It's awful hard for a town - and the town motto is 'The Town that Paper Made' - to be filing a lien on a mill that's been in in the town since 1907," he says.
Marston says generations of his family have made a living at the mill. "Myself, my father, my grandfather, my great-grandfather and my great-great-grandfather all worked at the mill, and we struggle with these decisions we have to make."
Marston says the town has until Oct. 15 to file the lien for overdue taxes, amounting to about $670,000 dollars.
The company, now owned by New Hampshire-based Cate Street Capital, has struggled for years. Cate Street closed the East Millinocket mill in January, and shortly thereafter laid off more than 200 workers, leaving a skeleton crew of about 40. DECD Commissioner George Gervais says a number of factors have led to the financial decline of what was once a major economic force of the Katahdin region.
"There are certainly a set of unfortunate circumstances that bring us to this point today," he says, "and I don't think the whole story has been told yet."
Gervais declined to elaborate on those circumstances. Great Northern Paper spokeswoman Alexandra Ritchie did not return a call by airtime. A call to the town office in East Millinocket was also not returned.
