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BANGOR – Still absent from a federal bankruptcy court are three documents considered vital to keeping Great Northern Paper Inc. from being sold in pieces at a liquidation sale.
And if those three documents aren’t filed in court by 9 a.m. Tuesday, a federal bankruptcy judge will be given a request to turn over the paper company’s two mills in Millinocket and East Millinocket to a creditor owed more than $50 million.
The creditor’s action would initiate a piecemeal sale.
The documents, if filed, are supposed to include much-anticipated agreements being negotiated in closed-door sessions by Great Northern’s owners, creditors, lenders and union representatives. Many of the meetings have taken place at the State House and have included Gov. John Baldacci, members of his staff and others.
For more than a week, Baldacci has wanted to announce that the deals were in place, according to a few members of his staff. But the negotiations have included “complicated problems and a lot of moving parts” that weren’t anticipated when the closed-door sessions began more than two weeks ago.
Today may be the last day that the three documents could be filed to give Judge Louis H. Kornreich adequate time to read them before Tuesday morning’s hearing. He already has at least 10 other motions – from contract disputes to payment requests – to consider Tuesday besides the three documents that still aren’t on his desk.
If those three documents make it to Kornreich in time, the creditor’s request to receive the two mills as collateral would become moot, according to an attorney representing the creditor.
The three documents are plans to:
. Change management at the paper company.
. Finance a “bare necessities” budget that would keep Great Northern’s two mills heated while a buyer is pursued.
. Limit administrative costs while the paper company is in bankruptcy protection.
Part of the “bare necessities” budget would be some sort of health care benefits package for Great Northern’s 1,130 workers and 677 retirees.
But as of Sunday afternoon, none of the agreements had been electronically filed into the bankruptcy court’s computer system. And none was physically delivered to the courthouse on Friday after a 3 p.m. conference the governor had with the negotiators to find out if they would be filed.
According to Baldacci’s office, the documents should be in Kornreich’s hands today.
Spokesman Lee Umphrey said the governor will be talking with the negotiators this morning “to agree on what’s been agreed upon.” Then most of the paperwork, excluding the health care benefits package, should be filed in court, he said. The health care package should be filed later today.
Umphrey said Sunday that he could not disclose the details on the health care benefits package. He said that in general terms the package would be funded by a possible combination of state and federal money, loans and private contributions. Trish Riley, chairwoman of the newly created Governor’s Office of Health Care Policy and Finance, is overseeing discussions on health benefits, he said.
Members of all of Great Northern’s 14 unions and its retirees will discuss health care benefits and other bankruptcy-related issues at a 3 p.m. meeting today at Schenck High School gym in East Millinocket, said Gerald Morrison, spokesman for the Katahdin Retirees Association.
“There will be so many people there I don’t think they will all fit into the gym,” he said.
Great Northern filed for Chapter 11 bankruptcy protection on Jan. 9, and subsequently announced that the two mills already shut down for more than a month will not be restarted under current ownership.
The paper company received emergency loans of up to $5 million to keep the mills heated through Tuesday. The money was to be spent on wages for a skeleton crew of 80 people, heating oil, electricity and other miscellaneous expenses.
On Jan. 24, Baldacci outlined a management change at Great Northern and said that an agreement on the leadership switch would be filed in court on Jan. 27. It hasn’t been presented to court yet.
Great Northern owner Lambert Bedard, in principle but not in writing, agreed to step aside as president of the two mills. In his place, Jim Giffune, former vice president of operations at Great Northern, will become chief restructuring officer and will market the mills for sale.
According to Kurt Adams, an attorney for the Governor’s Office, the management-change agreement hadn’t been filed with the court last week because lawyers with bankruptcy expertise had to be selected to assist Giffune, and discussions on who would pay the lawyers had to take place.
On Friday, Adams said Baldacci “was forceful” in his Friday afternoon conference with negotiators that the agreements had to be completed by today.
“There is nothing that I can see on the horizon that suggests a problem with the deals,” Adams said. “The governor understands the level of anxiety that exists in those communities. Nobody in this complex case has thought that this deal in not going to be in place.”
According to Maine Department of Labor estimates, a prolonged shutdown of the mills would claim 5,000 jobs and eliminate $115 million in annual wages from the state and national economies.
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