BANGOR – One of at least three interested buyers has offered more than $70 million in a bidding war for bankrupt Great Northern Paper Inc.

But the name of the buyer may not be announced until March 15, after an auction in federal bankruptcy court. Then it could take another month to wrap up financing, complete talks with union representatives and get operations on line.

Individuals heavily involved in closed-door discussions at the State House about reopening the paper company’s two mills confirmed the offer Wednesday, but they could not disclose exactly what the money would buy.

“There are people putting in numbers,” said one individual, who asked not to be identified. “It’s too early in the process to say what the number is going to be. The devil’s in the details. Are some things in, are some things out, and are some people left out in the cold? All of those things are so wide open nobody knows what they’re worth.”

According to individuals attending the closed-door sessions, St. Mary’s Ltd. of Sault Ste. Marie, Ontario, is the primary contender for the mills.

What is likely to occur is that the buyer would solely purchase the paper company’s assets and not its operations. Typically in bankruptcy proceedings, only assets are purchased and the new owner installs its own operations because it does not want to assume the debt of the previous owners.

Great Northern filed for bankruptcy on Jan. 9 and, in court documents, stated that it collectively owed more than 1,000 creditors more than $100 million. Financial statements on who is owed what are due in federal bankruptcy court on Feb. 18.

The paper company’s mills in Millinocket and East Millinocket have been shut down since late December, and most of the 1,130 workers have been collecting unemployment checks since then. A skeleton crew of 80 people is maintaining the facilities, and Great Northern is operating with emergency, court-approved loans to pay those workers and to pay for heating oil and other expenses.

In a telephone interview Wednesday evening, Gov. John Baldacci would not comment on whether there were one or more offers for the mills, only that numerous options are being given “serious thought.”

Last Friday, Baldacci announced that Great Northern owner and president Lambert Bedard had agreed to step aside as chief manager of the mills. Bedard would remain as owner of the company, and a management team led by Jim Giffune, former GNP vice president of operations, would oversee the mills and market them for sale.

Baldacci also said last week that financing was being secured to keep the mills heated beyond Feb. 4.

The management change was supposed to be presented to bankruptcy court on Monday, but was not filed as of Wednesday evening. The financing plan also had not been filed.

According to participants in the closed-door meetings, it is important that a deal to put a management team in place and keep the plants heated be filed before a scheduled court hearing at 9 a.m. Tuesday.

One source said Baldacci had been persistent in making sure that people involved in the talks are focused on giving the bankruptcy judge a proposal that would keep Great Northern in Chapter 11 protection while the mills are marketed to a buyer. The alternative, the individual said, is that the judge would place Great Northern in Chapter 7, creditors would make claims on the assets, and the facilities would be liquidated.

One creditor, BCC Equipment Leasing Corp., a subsidiary of Boeing Corp., has filed a request with the court to collect its claims to virtually all of Great Northern’s assets – mills, machines and other equipment – if an agreement isn’t worked out in the closed-door talks by Tuesday morning. BCC is part of those negotiations, and an attorney for the lender said the request was given to the court as backup in case the closed-door talks break down.

According to Baldacci, the talks won’t fall apart.

“Things are moving forward,” the governor said. “I’ve been so determined to make sure we stay on track and reinforce Jim [Giffune] and his team.”

Before a buyer’s offer can be seriously considered, an assessment of what the mills are worth needs to be conducted. One of the meeting participants said creditors wanted to ensure that Bedard was not making that assessment, and that instead a management team acceptable to all interested parties was making the valuation.

All of the creditors agreed that Giffune should be the manager. After that, discussions focused on attorneys to hire to assist him with legal matters and who should pay for the attorneys.

Although Giffune hasn’t been legally approved to manage the mills, he has been walking through them to prepare his valuation, one individual said.

“Nobody knows, until Giffune gets in there, how much they are really worth,” the individual said.

Once Bedard agreed to step aside, and the creditors approved Giffune as manager, discussions turned to securing loans and payment arrangements from lenders to keep the mills heated beyond Feb. 4. Most of the terms are wrapped up, the individual said.

Now discussions are focused on coming up with an arrangement to provide health care benefits to Great Northern’s workers and retirees while the mills remain shut down, the individual said.

“The one big issue out there is how health care will be funded,” said the individual, who would not elaborate on what kind of plan is being arranged. “And that’s almost done.”

Owners face lawsuit

In a separate court, a New York entrepreneur who last August invested $1.2 million in Inexcon of Maine, the parent company of Great Northern, is suing Inexcon’s two primary owners for failing to make him a one-third owner.

Mendel Schwimmer, a resident of Brooklyn, N.Y., stated in documents filed last week in United States District Court in Bangor that Bedard and co-owner Joseph Kass breached a contract that would have given him a one-third stake in Inexcon, including a decision-making role in whether Great Northern is sold.

Schwimmer is asking to air his case before a jury. No court date has been set, and Bedard and Kass have not filed responses to the lawsuit.

Kass, in a short telephone interview Wednesday from his home near Montreal, said he was not aware of the lawsuit.

“I’m surprised to hear about it,” Kass said.

According to the lawsuit, Schwimmer holds 10 percent of the stock in Inexcon, and Bedard and Kass equally share the other 90 percent.

In the lawsuit, Schwimmer said that on Aug. 1, Kass and Bedard “induced” him to provide a revolving loan of $1 million. In exchange for the loan, Bedard and Kass “expressly promised” to make Schwimmer a one-third partner in Inexcon, to issue him 3.5 million shares of the company, and to pay him “the first $5 million” of the net proceeds generated by any sale of Great Northern.

Also, the three men agreed that each of them would have to give unanimous consent to any financial plan affecting Great Northern and Inexcon, according to the lawsuit.

Those financial plans would include whether to issue any additional stock in the company, authorize an initial public offering of stock in Inexcon or GNP, sell GNP or Inexcon, or purchase another company.

Schwimmer seeks “specific enforcement of Kass and Bedard’s promise to make him a one-third owner,” to repay the $1.2 million loan with interest, and to pay other damages and attorney’s fees.

NEWS reporter Mary Anne Lagasse contributed to this report.