The mill in East Millinocket, once one of Maine’s most prolific producers of paper, appears headed for the scrap heap.
The mill, most recently operated by investment firms that failed to revive paper production, has been sold to a Florida company, North American Recovery Management. Records filed with the Penobscot County Registry of Deeds show the transaction was completed March 3.
The documents were signed by Jason Inoff, chief financial officer of North American Recovery Management. Inoff’s LinkedIn profile shows the company was created in January to invest in properties with “obsolete assets requiring demolition,” and other environmental remediation.
An email sent to Inoff seeking clarification of his plans for the mill was not answered. There is no website for North American Recovery Management.
The mill was sold by Hackman Capital Acquisition, a Los Angeles investment firm that bought the plant in a bankruptcy auction for $5.4 million in December 2014.
“I believe they tried to find a potential operator, or someone to repurpose the mill for another use, but couldn’t find anyone,” said Randy Creswell, an attorney with Perkins Thompson, the firm acting as bankruptcy trustee. “I think (Hackman Capital) was trying to be a good citizen about this. My understanding is they’ve sold it to specialists in demolishing large industrial sites.”
At its peak, the mill and its sister plant in Millinocket employed 4,000 people in the best-paying manufacturing jobs in the state. Unemployment was rare until seismic changes in global paper markets started to hammer domestic paper producers. Foreign companies could make paper cheaper – especially newsprint, which was the Millinocket area mills’ specialty – leading to an oversupply and declining prices in the 1990s.
The Millinocket mill shut down in 2008 and was demolished last year. The East Millinocket mill was idled in April 2011 by then-owner Katahdin Paper, leaving 450 people without work. Later that year, it received a reprieve when it was purchased by a New Hampshire investment firm, Cate Street Capital, which reopened the mill in October and rehired 250 people. The firm also revived the mill’s original name, Great Northern Paper.
But that production run was short-lived. Despite getting $40 million in taxpayer-backed financing, mill operators closed the East Millinocket mill in February 2014, citing high energy and wood costs.
Its financial dealings were the subject of a Portland Press Herald investigation that revealed abuses of Maine’s New Markets tax credit program, under which the financing was arranged. The tax credit program underwent legislative and administrative scrutiny, leading to the closure of some of its loopholes.
The mill never reopened.
Creswell said the sale of the property has little bearing on two bankruptcies associated with the mill. GNP Holdings is the entity that owned the mill’s equipment and buildings, while GNP East owns the land.
Hackman Capital had a lease on the land, which presumably would transfer to the new owner, North American Recovery Management.
Without a lease, there could be no access to the mill to either remove remaining equipment to sell for scrap, or to demolish the buildings, said Creswell. Hackman also had an option to buy the land for $350,000 from GNP East, which could be exercised by North American Recovery Management.
Of the $5.4 million received from the auction of the mill, a little less than $1 million remains to pay creditors. Creswell said the bankruptcy trustee made a disbursement of a few hundred thousand dollars just before Christmas to a class of GNP Holdings creditors who were primarily employees owed back wages.
Other unsecured creditors are awaiting payments, which could be received by year’s end, depending on bankruptcy regulations.
Send questions/comments to the editors.
