BANGOR – A Bangor native who now owns a Memphis, Tenn.-based business acquisitions company is one of two individuals to give the trustee of Eastern Pulp and Paper Corp.’s bankrupt estate a proposed offer for the mills.

Donald C. McCann, who left Bangor in 1979, has provided the trustee, Bangor attorney Gary Growe, with a “term sheet,” according to a source close to the negotiations who asked not to be identified.

The source said McCann would purchase both mills in Lincoln and Brewer and restart Lincoln. He has not determined what he will do yet with Brewer, according to the source.

A “term sheet” is not considered to be an actual bid to purchase the mills, at least not at this stage in the process to secure an offer to submit to U.S. Bankruptcy Court. Instead, the “term sheet” is a signed document that states what a prospective buyer is willing to pay for one or both mills. If Growe receives more than one – and on Thursday afternoon he confirmed he had received two – he will review them and select the best to be a “stalking horse bidder” for one or both of the mills.

A “stalking horse bidder” is an individual or business that has put its neck out to tell other prospective buyers what it’s willing to pay and for what. Other suitors then review the “stalking horse bidder’s” offer, and they decide whether it’s worth the investment to top it.

If so, an auction takes place in bankruptcy court.

Growe said he would not identify the individuals who submitted term sheets to him, and he would not disclose the contents.

“I’m optimistic that by the middle of next week, I’ll have an offer,” Growe said. “I’m far more optimistic than I was on Monday.”

McCann was unreachable for comment Thursday night.

McCann moved from Bangor to New York when he was elected vice president and general manager of the former Diamond International fiber products division in April 1979.

After Diamond, he became part of the management team of Mobil Chemical Co.’s plastics packaging division. Later, he became majority owner of Elm Packaging Co. LP, a maker of foam polystyrene containers. He sold Elm in 1998.

In 2002, he started DCM Acquisition Co. to look for acquisition opportunities in flexible or rigid packaging, according to published reports. DCM, based in Memphis, was seeking companies with sales between $15 million and $100 million that produce food-service, consumer, industrial or institutional products, McCann told Plastics News.

“We prefer companies with underutilized assets,” McCann told the publication. “That sets me aside from a lot of investment bankers looking for higher returns.”

McCann was one of 18 children born to Edward L. and Edith (Soucy) McCann Sr. He attended John Bapst High School and LaSalle University, according to his brother, Paul W. McCann of Brewer.

“I see him very, very little,” Paul McCann said Thursday evening. “He’s been off on ventures.”

Paul McCann said he thinks it would be “great” if his brother eventually purchased Eastern.

“I think it would be fantastic,” he said. “That way I’d get to see him more often.”

Eastern situation desperate

On Monday, Growe was in desperate need to secure money from any of Eastern Pulp’s four major lenders to keep the company’s mills in a “warm stasis” mode beyond noon Tuesday. Without money to pay for electricity, water, heating oil and other expenses needed to keep the mills maintained and warm by a skeleton crew of workers, Growe said he would have had to permanently shut down the facilities.

After hours of negotiations on Tuesday and Wednesday, including an 11-hour session in a meeting room next to Gov. John Baldacci’s office at the State House, Growe was able to secure $240,000 to pay expenses through Feb. 18.

However, without any indication that he would have more funds to continue the “warm stasis,” Growe on Wednesday filed a notice in bankruptcy court to abandon the real estate, machinery and inventory at both mills unless a bona fide offer was received by then. Growe does not want to abandon the rights to proprietary trade secrets, trade processes and intellectual property because these assets “have value,” he said, and they don’t cost any money to protect them from deterioration.

Eastern Pulp ceased to exist on Feb. 4 when a federal bankruptcy judge converted its bankruptcy status to Chapter 7, or liquidation, from Chapter 11, or protection from creditors, a spot the papermaker had been in since September 2000. More than 750 people lost their jobs at the company’s mills, Lincoln Pulp and Paper Co. in Lincoln and Eastern Fine Paper Co. in Brewer, as well as at the company’s headquarters in Amherst, Mass. Growe was appointed trustee to manage and liquidate the company’s assets.

DEP to fight abandonment

Today, the state Department of Environmental Protection will file an objection to Growe’s abandonment notice and will tell U.S. Bankruptcy Chief Judge James B. Haines that if the facilities are abandoned, major environmental damage will follow that the state would be forced to clean up.

Kurt Adams, legal counsel for Baldacci, said Thursday that the toxins, untreated wastewater and other pollutants that could seep from the mills would create “an uncontrolled hazardous waste site” that could cost millions to fix. The state is preparing to take legal action to recoup cleanup costs if the mills actually are abandoned, he said.

But Adams agreed with Growe that the abandonment notice and the DEP’s objection are procedural moves in case a buyer is not found by Feb. 18 and no additional money is made available to keep the mills warm.

Baldacci, in a statement prepared Thursday that is scheduled to be released when the DEP’s objection is filed in bankruptcy court, said “the state will not stand by and let the trustee abandon the premises.”

“In pushing for this objection, I want to keep everyone’s feet to the fire and secure the future for these workers and mills,” stated Baldacci, who left Thursday evening for a trade mission in Quebec City.

Jack Cashman, commissioner of the state Department of Economic and Community Development, said Thursday that he is continuing to meet with interested buyers. Growe also was meeting with a candidate on Thursday evening.

“I think we’re in pretty good shape and making progress on all fronts,” Cashman said. “Let’s just suffice it to say we’ve got six interested buyers who are in the paper business.”

Possible buyers

On Monday evening, Adams confirmed that McCann was one of the individuals who submitted a term sheet. He said he could not disclose the other one. Adams also said that Cascades Inc. of Montreal, which produces packaging, tissues and fine papers, a similar mix to the product line manufactured at Lincoln, is seriously considering the mills but has not submitted a term sheet.

Other companies that may be interested, according to a source close to the negotiations who asked not to be identified, include:

. Meriturn Partners of Raleigh, N.C., and San Francisco. Meriturn is an investor for middle-market restructurings and turnarounds, according to the group’s Web site. The group late last year purchased Curtis Specialty Papers in Port Huron, Mich.

. Erving Paper Mills Inc. of Erving, Mass. The company uses scraps of raw paper, post-consumer products, print rejects and newsprint, and converts them into absorbent tissue, napkins and towels, according to its Web site.

. Cellu Tissue Holdings Inc. of East Hartford, Conn. Cellu owns four independent paper companies, which produce specialty machine glazed papers, specialty and color dry crepe tissues, and specialty tissue and machine glaze paper grades. The specialty tissue is used in a variety of personal hygienic products, including baby diapers, adult incontinence products, surgical wadding and sponges, and other items.

Besides Lincoln, Cellu is the only other producer of specialty and color dry crepe tissues in the United States.

. Tom Reid of Great Britain, an investment broker tied to Tiar Group, a consulting firm in California. No information on Reid was obtainable Thursday evening.

People ready to help displaced workers

Brewer area:

. Food can be dropped off at the Brewer Recreation Department (Brewer Auditorium), Wilson Street.

. A food bank for displaced workers will be open from 8:30 a.m. to 2 p.m. on Saturdays at the Greater Bangor Area Labor Council hall, 20 Ayer St. Sponsored by PACE Local No. 1-0403.

. To donate for fuel assistance, mail checks payable to PACE Local 1-0403, in care of City of Brewer, 80 North Main St., Brewer 04412.

Lincoln area:

. St. Mary’s Food Cupboard is open 9 a.m.-noon Monday-Friday in the basement of the Ballard Hill Community Center. The food cupboard is open for displaced workers according to the first letter of their last names:

. Mondays ? names beginning with letters A-F.

. Wednesdays ? names beginning with letters G-L.

. Thursdays ? names beginning with letters M-R.

. Fridays ? names beginning with letters S-Z.

The food cupboard is open 9 a.m.-noon Tuesdays for anyone else who needs food assistance. For information, call 794-3510 or 794-8148.

. Food assistance is available 7-11 a.m. Thursdays from the food pantry at the Howland United Methodist Church. For information, call 732-3589.

. Food assistance is available 10-11 a.m. Mondays from the food pantry at the Chester Baptist Church on Route 116. For information, call 794-2541.

. Fuel assistance is available by calling Pastor Tim Shaw at the Community Evangel Temple in Lincoln at 794-6181. Donations can be made out to “LP&P Fuel Assistance” in care of Machias Savings Bank, 29 Main St. Lincoln 04457.

Key Phone Numbers:

. Displaced workers can obtain information about unemployment benefits by calling toll-free (800) 593-7660.

. Displaced workers can obtain information about the MaineCare health care program by calling (800) 432-7825.