GNP finances, not payments, focus of meeting

BANGOR – Creditors and former employees of Great Northern Paper Inc. who want to know whether they will be paid the millions of dollars they’re owed will not receive an answer at a meeting of creditors today.

Instead, today’s creditors’ meeting will provide an opportunity for the trustee for bankrupt Great Northern and the creditors to get a better understanding of the company’s financial operations prior to the Jan. 9 bankruptcy filing.

Great Northern’s unsecured creditors are owed at least $70 million, and its former employees and retirees are owed more than $6 million.

Similarly, any of the hundreds of companies nationwide that collectively were paid $46.6 million in the 90 days prior to Great Northern’s filing for bankruptcy will not find out today whether they will be asked to send that money back to the estate.

The estate’s trustee has the authority to ask for a recall of any or all the payments he believes were made preferentially to some creditors in the months before the bankruptcy.

“Unfortunately, there’s not a lot I can do to relieve their anxiety,” said Attorney Gary Growe, the trustee for bankrupt Great Northern. “I’d love to tell people when they’re going to be paid and if they’re going to be paid. That’s not what [creditors’] meetings are for and it’s too early in the process to let people know.”

Growe said he is expected to question Great Northern’s former controller, Sandy Perkins, on the company’s financial situation prior to the bankruptcy filing. Some of the questions may include whether all the financial records are in place and accessible and how suppliers, insiders and employees were paid last year.

“The meeting is not going to provide any startling insight,” said Growe on Monday.

The meeting will begin at 9 a.m. in U.S. District Court on the third floor of the Margaret Chase Smith Federal Building in downtown Bangor.

For more than four months, Great Northern was under Chapter 11 bankruptcy protection, which afforded the company protection from creditors while it sought a buyer. In mid-May, after the company’s two mills were sold to Brascan Corp. of Toronto, Great Northern’s bankruptcy status was changed to Chapter 7 or liquidation of remaining assets, most of which are expected to go to Boeing Capital Corp., Great Northern’s primary secured creditor.

Although the mills were sold quickly, the bankruptcy process usually takes time, Growe said. Thousands of pages of financial documents will need to be analyzed before a decision is made on whether “preference payment” recall notices will be sent out to creditors.

About two weeks ago, Growe and Boeing Capital reached an agreement that guarantees at least $600,000 of the money from the sale of assets will be allocated to pay former Great Northern employees a portion of what they are owed.

Great Northern’s creditors and employees should have received a claims notice recently with instructions on how to file a claim, Growe said. Governmental units have 180 days from Jan. 9 to file a proof of claim against the bankrupt estate, and all other creditor claims are due by Oct. 6.

Growe said he would not be able to provide legal advice or to help creditors or former employees with filing claims.

In the meantime, former Great Northern Chief Executive Officer Lambert Bedard and his son’s consulting firm, Bilodard Inc., which is based in Quebec, have temporarily withdrawn their requests to be paid administrative fees of more than $130,000 for January through mid-May.

Nicholas Walsh, an attorney for Bedard and Bilodard, said Monday he would resubmit the request at a later date. “We’re revising our argument,” Walsh said.

The Office of the United States Trustee has reserved its right to object to Bedard and Bilodard being paid.