BANGOR – Attorneys in Great Northern Paper’s bankruptcy got a stern lecture Tuesday morning.

U.S. Bankruptcy Judge Louis H. Kornreich told them when it was appropriate and not appropriate to object to the way the paper company is being sold.

The advice was given after Kornreich was presented with another attempt to halt or delay the payment of $6.2 million in breakup fees and expenses to the Canadian company that was the first bidder but unsuccessful buyer of Great Northern.

Three attorneys representing Eastern Maine Healthcare, Millinocket Regional Hospital and Maine Health Alliance attempted to convince Kornreich that some or all of the $6.2 million should be put into an escrow account instead of a check payable to Belgravia Paper Co. of Vancouver, British Columbia.

In February, Belgravia was named the “stalking horse bidder” for Great Northern by submitting a $91 million offer that other potential bidders would have to meet or beat. One of the conditions in Belgravia’s offer was that it be paid $5 million in a breakup fee and up to $750,000 to cover expenses if it were outbid successfully by another company.

In late March, Belgravia stepped aside as the buyer after a two-day court proceeding when it realized that public support was behind Brascan Corp. of Toronto to be the next owner of Great Northern. Brascan agreed to pay Belgravia another $500,000 to withdraw its offer.

The attorneys on Tuesday argued that the document authorizing the $103 million sale of Great Northern to Brascan listed Belgravia’s $6.2 million bill for deal-ending fees as an administrative charge similar to the nearly $77.8 million in unsecured debts that Great Northern owes creditors in Maine and throughout the country. A determination of how much to pay Belgravia on its bill should be made at a later date, according to the attorneys.

“It may turn out that Belgravia gets all that money,” said Thomas Brown, a Bangor attorney representing Eastern Maine Healthcare. “They negotiated that wording [in the sales document]. I didn’t negotiate that wording.”

Kornreich, however, ruled that it was too late to fight the breakup fees, calling them a condition to closing a sale of the mills instead of an administrative charge. He said the $6.2 million fees were the consequences of a sale that was on a “fast track” to completion since attorneys in mid-January agreed to a three-month timetable to hurry up and get the mills sold and reopened.

“Whether for economic reasons, altruistic reasons or good citizenship reasons, people wanted these assets to be sold right away,” said Kornreich, adding that if the attorneys agreed to a “fast track” they can’t come back when the sale is almost done and complain that it happened too fast.

Throughout Tuesday’s court hearing, Kornreich listed all of the opportunities at which the attorneys could have fought the breakup fees. The judge said the attorneys knew that the breakup fees were part of Belgravia’s “stalking horse” bid before it was presented to him for approval. But, he said, they agreed that the bid should be submitted to the court instead of asking for more time to try to secure a better offer.

Kornreich, who has acknowledged in court numerous times that he personally doesn’t like the breakup fees, approved the “stalking horse bid” because he was convinced that Great Northern’s chief executive officer accepted it using “good business judgment.”

Kornreich also stated that on the day he approved the sale to Brascan, only one attorney “courageously” tried to fight the $6.2 million in fees but later agreed to let the fees be part of the sale as long as he could appeal them at a later date.

“Everyone was being given an opportunity to object to the breakup fees,” Kornreich said. “Instead of objecting, the parties chose to proceed [with the sale].”

Jay Geller, a Portland attorney representing the official unsecured creditors’ committee, late last week filed an appeal of Kornreich’s decision in February to allow the breakup fee to be part of the “stalking horse.” On Tuesday, Kornreich noted that the appeal would not disrupt his order to complete the sale to Brascan.

After his ruling that the $6.2 million in breakup fees would not be placed into an escrow account, Kornreich admonished the attorneys for not being more careful in agreeing to certain conditions of a sale without anticipating the consequences of those decisions.

He said “there are dangers” to agreeing to breakup fees, expense reimbursements or other questionable conditions, “whether for selfish reasons or for the community good.”

“There are dangers to agreeing so that certain things can happen at certain times,” Kornreich said. “So I caution the parties that if they are unhappy about their behaviors in this case they should monitor their behaviors in future cases.”

On Monday, Brascan notified Kornreich that it would not be able to close the sale by the end of the day, which was a date on the timetable approved by all of the more than 30 attorneys involved in the bankruptcy case. Brascan attorney Jacob Manheimer said environmental concerns about the properties need to be worked out before the sale can close. A court hearing is scheduled for Friday to air those concerns plus address changes to Brascan’s purchase agreement.

Manheimer said he expects to close the sale by May 5.