GNP’s landfill settlement talks slow

BANGOR – Great Northern Paper Inc.’s efforts to settle a landfill transfer dispute with its parent company, Inexcon Maine, broke up Tuesday night without a resolution.

Great Northern needs the title to Dolby landfill back in its possession to finalize a $103 million sale of the financially strapped company to Brascan Corp. of Toronto. Brascan must take ownership of Great Northern’s two mills by April 21 or the properties will be sold off piecemeal to pay creditors.

U.S. Bankruptcy Court Chief Judge James Haines Jr. in Portland was overseeing Tuesday’s mediation talks that ended after nearly 11 hours with little accomplished, according to attorneys who participated in the discussions.

“We’ve made significant headway, but there remains significant obstacles,” said Nicholas Walsh, a Portland attorney representing Inexcon Maine.

In the meantime, the Maine Department of Environmental Protection has sent its case against Inexcon Maine to the state Attorney General’s Office. DEP has notified Inexcon Maine that it may be operating an “illegal solid waste disposal facility” because “ownership transfer occurred without first obtaining required approvals from the state.”

DEP Deputy Commissioner Brook Barnes said Wednesday that “we have formally referred the violations to the Attorney General’s Office for any actions that they deem appropriate.” He said that could include a lawsuit.

According to Barnes, Inexcon Maine did not respond adequately to a DEP “notice of violation” that was sent last month.

Walsh, Inexcon Maine’s attorney, did not return a telephone call for comment Wednesday.

Inexcon Maine, owned by Lambert Bedard, the former chief executive officer of Great Northern, claims it has had ownership of the Dolby landfill in East Millinocket for almost two years.

In June 2001, Great Northern’s board of directors agreed to transfer ownership of parcels of land and property, including the landfill, to Bedard and Inexcon Maine. According to a 10-count lawsuit filed against Inexcon Maine and Bedard last month, the transfer was conducted as part of an alleged “wrongful and improper scheme” so that Inexcon Maine and Bedard could obtain about $3 million in loans from Katahdin Federal Credit Union in Millinocket.

In an interview last week, Bedard said the land transfer was conducted properly, and that the $3 million was spent by Great Northern. He said if Great Northern wants the landfill and other properties back, he would need to be reimbursed at least $3.2 million to cover the loans and expenses.

On Tuesday, Judge Haines attempted to mediate settlement discussions on the lawsuit between attorneys for Great Northern and Inexcon Maine, along with Bedard and Jim Giffune, recently appointed chief executive officer of Great Northern.

The private talks began at 9 a.m. in conference rooms at the federal bankruptcy court in Portland and ended just before 8 p.m.

On his way out, Walsh, the Inexcon Maine lawyer, said the talks were ending for the night, and that his client, Bedard and Great Northern’s attorneys would continue the discussions outside the courtroom starting Wednesday.

Also on his way out, Giffune, flanked by two of Great Northern’s attorneys, Dan Bleck and Timothy Langella of Boston, said he is hopeful that the landfill dispute could be resolved before a court-set trial date of April 14.

Calls to all of the attorneys on Wednesday were not returned.

U.S. Bankruptcy Judge Louis H. Kornreich has scheduled a two-day trial starting April 14 in Bangor on four counts of the 10-count lawsuit that pertain to whether a fraudulent land transfer took place.

Brascan has proceeded with its “to-do” list to complete the sale. On Tuesday, it was circulating an asset purchase agreement for signatures by Giffune before it is filed with the federal bankruptcy court. Earlier this week,

Brascan printed a legal notice in the Bangor Daily News which stated that it was seeking permission from Maine DEP to transfer all environmental permits held by Great Northern to its company.

Tonight, Gov. John Baldacci is scheduled to introduce Richard Legault, executive vice president of Brascan, and Bert Martin, president of Nexfor-Fraser Papers, a subsidiary of Brascan, as the new owners of Great Northern at the annual dinner of the Maine Pulp and Paper Association at the University of Maine.