Ex-Polaroid VP bids on Eastern Negotiations for mill still ‘delicate’

BANGOR – The bidder for bankrupt Eastern Pulp and Paper Corp. is a former vice president of Polaroid Corp. in Massachusetts who has bought and sold a number of companies over the last 25 years.

His partner is a businessman who developed a dye that turns golf balls a grayish hue when waterlogged. Legendary golfer Greg Norman endorsed the technology last October, according to published reports.

Satish Agrawal of Concord, Mass., who besides being a Polaroid vice president also was the company’s first chief technology officer, confirmed Thursday night that he is in negotiations to purchase both mills and change the company’s direction into papers used in digital imaging equipment and other products while continuing to manufacture tissue products.

“Our interest in this mill is to really make it a success with new products,” said Agrawal, whose professional career has been focused on imaging processes and products. “We haven’t got it yet and we hope that we will.”

Agrawal would not disclose how much he has offered and said those negotiations remain “delicate.” He said that a number of creditors want to be satisfied that they’ll receive some return on the millions they’ve lent Eastern Pulp.

“I hope we can all get on the same page,” Agrawal said.

One offer disclosed during a Wednesday hearing in U.S. Bankruptcy Court in Portland was $8 million, and according to Fred Bopp III, a Portland attorney representing Eastern Pulp’s trustee, that amount wasn’t satisfactory to creditors. Agrawal would not say whether that was his bid.

What makes Eastern Pulp attractive to Agrawal is that he already has an affiliation with the company. Agrawal said his name is on two patent-pending digital paper processes that were being developed by Eastern Pulp before its shutdown last month. The patent applications still are being processed at the U.S. Patent Office in Washington, D.C., and approval is needed before production of the paper can begin, he said.

Any of Eastern Pulp’s patents or patents pending “are worth a lot of money,” and sales negotiations could get stuck on how much money they actually are worth, according to a source who asked not to be identified.

Agrawal said his partner, Robb Osinski of Salisbury, Mass., is handling the negotiations.

Osinski, in his early 40s, is an avid golfer, product developer and former vice president of First Eastern Mortgage in Massachusetts. Osinski owns Performance Indicator of Topsfield, Mass., with Bob Winskowicz of North Andover. The men created a color-changing technology that turns the white casing around golf balls into a battleship gray color when the balls’ cores fill with water.

According to a source close to the sales negotiations, Agrawal and Osinski plan to restart the Lincoln mill as soon as a sale is closed. Some of Brewer’s operations may be consolidated into Lincoln while the owners, along with a team of sales and management professionals, evaluate the future of the Brewer mill, said the source, who asked not to be identified. Up to 500 jobs will return of the 750 positions that were lost when both mills were closed.

Efforts to sell the mills accelerated on Thursday, one day after U.S. Bankruptcy Chief Judge James B. Haines postponed until Monday a court hearing on whether the mills should be abandoned. That essentially gave any interested buyer more time to solidify a satisfactory offer or what’s called a “stalking horse bid” in bankruptcy lingo.

“The good news is it’s still alive,” said Agrawal, about efforts to sell the mills. “The bad news is [the sale’s] not closed yet.”

A “stalking horse bid” is a low-ball offer or starting point for a court-sponsored auction of the company. Other interested buyers would have to top the “stalking horse bid” in order to successfully purchase Eastern Pulp.

Until Monday, the mills – Lincoln Pulp and Paper Co. in Lincoln and Eastern Fine Paper Co. in Brewer – will remain in “warm stasis” or maintained from possible breakdown by a skeleton crew.

In the meantime, the Bangor native who was interested in purchasing the mills, Donald C. McCann of DCM Acquisitions of Memphis, Tenn., has walked away from the negotiations, according to his attorney, Sean McGuinness of Washington, D.C. He said that McCann’s $9.5 million offer wasn’t being taken seriously because it was contingent on securing funding for most of the purchase price after it was accepted as the “stalking horse,” but it did include $2 million payable next week to immediately restart the mills.

If no buyer is announced at the start of Monday’s court hearing, the focus will turn to abandonment and environmental cleanup issues pertaining to both mills if they are permanently closed. The Department of Environmental Protection opposes abandonment, arguing that hazardous materials at the site pose an “immediate and imminent threat” to human health and the environment if they aren’t cleaned up. DEP says the state has no money to detoxify the facilities, and the trustee, Bangor attorney Gary Growe, says he doesn’t either.

DEP has threatened to put liens on the mills to cover the cleanup costs, but creditor Congress Financial Corp. of New York City is fighting DEP’s efforts. Congress Financial was to go to U.S. District Court on Thursday to place a temporary restraining order on the DEP, but the hearing was postponed hours before it was to take place. Both the lender and the state agreed that “it was in everybody’s best interest” to try to sell the mills over the next few days, thus eliminating the risk of a possible environmental catastrophe, according to Kurt Adams, legal counsel for Gov. John E. Baldacci.