Baldacci: Eastern deal likely today Fisher partners prospective buyer

BANGOR – Gov. John Baldacci said Monday evening that he could announce an agreement to purchase the abandoned Eastern Pulp and Paper Corp. by the end of the day today.

“Things with Eastern are progressing,” Baldacci said. “There were positive discussions [Monday] and hopefully I’ve been given an indication that, within a day, we should have a decision in terms of proceeding.”

The deal, however, will not be ready to present to U.S. Bankruptcy Court. Eastern Pulp was kicked out of bankruptcy court on March 12 and its properties ordered abandoned by a federal bankruptcy judge. The Baldacci administration wants Eastern Pulp sold through the bankruptcy court process so that all of its liens are taken care of at one time.

Baldacci said that once the agreement is reached, the buyer and the state “will be preparing the paperwork to go to bankruptcy court.”

The Baldacci administration has been negotiating with John Wissmann and Keith Van Scoter, directors at Fisher International of South Norwalk, Conn., the governor said. Baldacci would not elaborate on how Wissmann and Van Scoter would manage the mills in Lincoln and Brewer.

“It’s Fisher, but it’s the principals with Fisher,” Baldacci said. “I guess they’re formally with Fisher, but it’s an entity that they’re going to be setting up or it’s what they propose to set up. They’re very well regarded and very respected people in the paper industry.”

For the last couple of weeks, Wissmann has said in telephone interviews that he could not identify the buyer. On Monday, he said he could not comment on whether he and Van Scoter were the buyers or whether he was representing another company.

“We’re progressing well, but that’s about all I can say,” Wissmann said Monday afternoon. “We’re probably 24 hours from having things figured out.”

Wissmann said he was not in Maine on Monday, but was handling other business for Fisher in another state.

“I’m doing my thing,” he said.

The possible announcement of a deal today does not coincide with any deadlines set by Wissmann or by the state to wrap up a sale. It is costing the state an estimated $36,000 a day to maintain the mills in Lincoln and Brewer.

“As far as I know, there aren’t any deadlines,” Wissmann said.

Since March 12, the state has been paying for a skeleton crew to watch and maintain the properties and buy heating oil and electricity, using what’s called the governor’s contingency fund and a Department of Environmental Protection hazardous waste cleanup fund. The $250,000 from both funds has been exhausted, and the DEP now wants to use an undetermined amount of money from two “uncontrolled hazardous waste substance cleanup” bonds that were approved by voters in 2001 and 2003. The bonds combined are worth $1.5 million, but DEP already has used $500,000 for other projects.

DEP has asked the state Treasurer’s Office to secure the remaining $1 million in bonds later this week, but it is unknown whether the entire amount will be spent to maintain the Eastern properties. According to state officials, the money had been earmarked for other remediation programs.

DEP Deputy Commissioner David Littell did not return a telephone call for comment Monday.

“In order to keep the mills warm, we’ve been utilizing some of the bond proceeds because of the environmental issues,” Baldacci said. “We’ve got a scaled-back budget, so we’re going on a day-by-day basis.”

In the meantime, Congress Financial Corp., one of Eastern Pulp’s primary lenders, is awaiting word on whether to proceed with its efforts to get a temporary restraining order placed on DEP for cleanup costs. In February, DEP said in bankruptcy court that it would place liens on Eastern Pulp’s creditors to cover cleanup costs, estimated to be up to $30 million. Congress Financial countered by filing a lawsuit and a request for a restraining order in U.S. District Court in Portland. Congress Financial and DEP agreed last month to put the case on hold until this Wednesday while a buyer was sought for the mills.

“The deadline’s coming and there’s been no agreement so far to extend this agreement,” John McVeigh, a Portland attorney representing Congress Financial, said Monday.

Baldacci, after conferring with chief legal counsel Kurt Adams, said Congress Financial and DEP “are talking about it.”

“I wish everyone luck on this,” Wissmann said.