But you still need to activate your account.
Sign in or Subscribe to view this content.
BANGOR – Eastern Pulp & Paper Corp., the parent company of mills in Lincoln and Brewer, has filed for protection from its creditors under Chapter 11 of the Bankruptcy Code.
The Sept. 22 filing in Bangor Bankruptcy Court lists debts totaling $181.3 million and assets of $187.8 million. At the Lincoln facility, debts are $110.66 million compared with assets of $113.97 million and at the Brewer facility, debts are $70.65 million compared with assets of $73.84 million, according to court documents.
Company officials said the filing would not affect about 1,000 employees who work at the two mills, or the mills’ operations, customers and suppliers.
“We feel a lot better today than we did a week or so ago,” said Joseph H. Torras, chairman of the company, during a telephone interview from his Amherst, Mass., office Monday. “What we need here is basically a time out. That is all this is.”
George J. Marcus, a Portland attorney representing Eastern Pulp & Paper Corp., said Chapter 11 provides a breathing period for a company that has accumulated debts it can’t pay.
“What it does is allow the company to continue in business while it comes up with a plan to reorganize its finances,” said Marcus. “The old debt is frozen and the companies continue in business,” he said. The Portland attorney said it could take nine months to a year to come up with the plan.
The owner of Eastern Pulp & Paper Corp. anticipates a successful Chapter 11 with the company emerging stronger and healthier. “We are going to be in excellent shape going ahead, really very sound,” said Torras.
As for speculation about the facilities closing, Torras said he has no such plans. “In a private company like ours nobody is going to walk away from anything,” he said. “This will not affect employees, our operations, our customers or our suppliers. We are going to pay everybody on a current basis as we go forward.”
Torras said the primary reasons for seeking the Chapter 11 protection included: depressed printing and writing paper markets, which in some cases brought prices below 1998 levels; higher energy and raw material costs; and the need for major environmental expenses. The company has spent nearly $70 million for environmental improvements during the last decade.
“As we did it, we felt our earnings would improve enough to let us pay for these things,” said Torras. “It turned out that things cost more than we thought they would. Our earnings were improving just as we thought they would, but not fast enough to let us finish up the environmental work and bring some of the older suppliers [bills] up to date too. Now, we can do that,” said Torras, who 32 years ago purchased and reopened the closed Lincoln mill.
The chairman said company suppliers had been understanding. “They have been very patient about getting paid. They all know we are doing everything we could,” said Torras. He said the company planned to pay its creditors gradually. Torras said one or two of the company’s suppliers wanted to be paid more than other suppliers, but the only way it could treat everybody equitably was to file for Chapter 11.
“Now, we are going to pay everyone on a current basis. Then sometime next year, we will get back into a position where we can handle the older stuff,” said the company chairman.
Torras said business was gradually getting stronger. He said the whole company has been making an operating profit for a number of months. “Everything is running really well,” the chairman said.
Community and union officials in Brewer and in Lincoln are optimistic about the future of the two mills, despite the filing.
Eastern Paper in Brewer is the city’s second largest employer and one of its larger taxpayers, paying about 5 percent of the city’s total taxes. The Eastern mill in Lincoln is the town’s largest taxpayer, paying 34 percent of the total taxes, and is its largest employer.
“We have been through worse than this,” said Steve Corriveau, president of Lincoln’s Local 396 of the Paper, Allied Chemical and Energy Workers International Union. “We have climbed so many mountains, this is just another one for us,” he said.
The Lincoln union official said environmentally the company is operating above and beyond legal requirements and on the production side it is running better than ever. “We are setting right now to have a real good run. I am optimistic about the future,” said Corriveau.
Doug Walsh, vice president and general manager of Eastern Paper’s Lincoln mill, said business has been improving in recent months. “Prices are on the upswing. Customer orders are solid and our machine backlogs are better than they have been in some time,” he said. Walsh is optimistic the filing will result in stable operations and allow the best opportunity for continued success.
Brewer Mayor Eddie Campbell described the filing as an opportunity for a “fine company with a great track record” to reorganize itself.
“We are absolutely confident they are going to pull through this,” said Campbell. “They have ownership and management that are beyond reproach. We have worked with Joe Torras and his family for a long time and they have character, competence and are trustworthy. That is what we need in all our businesses,” he said.
Like Campbell, Lincoln Town Manager Glenn Aho is also confident about the future of Eastern’s mills.
“I feel confident and optimistic about the mill’s future because of information mill officials have forwarded to me, but above all because Joe Torras’ heart is in this community,” said Aho.
“The mill and the town are almost like family,” said the Lincoln manager, referring to the fact that Torras reopened the closed mill in 1968. “It was the owner of this company, Joe Torras, who breathed life back into the business and today he is financially restructuring that business to have it continue in the future.”
John Zachary, president of PACE Local 10403 at the Brewer mill, said the union is very optimistic about Torras’ efforts to reorganize the business to keep it fresh and alive. He said one of the factors the mill is fighting is overseas competition. “We are affected by the euro dollar with cheap imported paper flooding the U.S. markets,” the Brewer union official said. “We are a private company not a multinational corporation. We are part of a family owned business and that is kind of rare these days,” he said.
Zachary said there has been a very close relationship between the two mills and he said that many generations of families have worked at both facilities.
The Brewer union official said Torras had invested a lot of money in the mills. “It is certainly not a situation where he has drained it dry. He has invested in people’s lives and the industry in both of these mills,” said Zachary.
Eastern Paper in Brewer was acquired in 1989 by Torras. It operates three paper machines and two coaters, which have been rebuilt since 1990. The Brewer mill produces silicone-coated paper for labels and fine printing and writing papers. The Lincoln mill, which has two paper machines and two tissue machines, produces pulp, specialty paper and tissue. Nearly all of the pulp used in Brewer is produced at the Lincoln mill.
The combined payrolls of the Brewer and Lincoln operations is $42 million.
Eastern has retained Altman & Company as its financial adviser, which is the same company involved in the successful restructuring of the Hathaway Shirt Co. in Waterville and United Timber Co. in Dixfield.
Lincoln Pulp and Paper (As of Aug. 31)
Total assets: $113,978,425 Total debts: $110,660,499
Top creditors (from list of 20)
$1,934,135.75 Cianbro Corp., Pittsfield $1,401,755.62 Bangor Hydro, Bangor $947,001.35 Crompton & Knowles, Dyes and Chemicals Div., Reading, Pa. $633,696.83 National Starch & Chemical Corp., Bridgewater, N.J. $482,500.00 EKA Nobel Inc., Charlotte, N.C.
Eastern Paper, Brewer (As of Aug. 31)
Total assets: $73,846,310 Total debts: $70,658,823
Top creditors:
$1,968,794.79 Irving Oil, Bangor $1,714,736.45 WassauPapers, Otis Mill, Milwaukee, Wis. $1,005,303.10 Irving Pulp and Paper Ltd., Boston, Mass. $943,056.05 Boise Cascade, Paper Group, Pittsburgh, Pa. $568,877.24 National Starch and Chemical CRP,
Comments
comments for this post are closed