PORTLAND (AP) – A bankruptcy court hearing was scheduled for Friday on a motion to abandon idled paper mills in Brewer and Lincoln owned by bankrupt Eastern Pulp and Paper Inc.
Gov. John Baldacci planned to meet in Portland with prospective buyers prior to the hearing in an effort to convince them to continue with efforts to buy the mills. The mills, which employed 750, shut down Jan. 16.
Paper Acquisition Corp. of Topsfield, Mass., signed a letter of intent last month to purchase the mills for $8.5 million contingent upon certain conditions being met.
The governor’s office said Baldacci was in contact with Paper Acquisition officials Thursday after learning that a key investor backed out of the deal. Because of that, Paper Acquisition has refused to put up the money needed to fund the auction process for the sale to go through.
An emergency court hearing was scheduled for Friday afternoon on a motion that was filed to abandon the mills.
, according to Baldacci spokesman Lee Umphrey. The motion was filed by the bankruptcy trustee, he said.
Baldacci said in a prepared statement that he and members of his administration will “continue to urge Paper Acquisition Corporation to move forward in this process.”
“My goal is to get the workers back to work and protect the interests of individuals, families and companies impacted by this shutdown,” the governor said.
Umphrey said the fate of the mills could be determined on Friday.
“It’s a make-or-break day,” he said.
U.S. Bankruptcy Chief Judge James Haines Jr. last week accepted Paper Acquisition’s $8.5 million “stalking horse” bid, which set up a court-sponsored auction that was scheduled for next week.
At the same time, the company was given until Friday to complete a definitive sales agreement.
The company was still ironing out what financial liability it might inherit because of potential environmental problems at the shuttered mills in Lincoln and Brewer.
Under terms of its letter of intent, Paper Acquisition could rescind its offer if it was unable to reach agreements with the state Department of Environmental Protection along with Eastern Pulp’s creditors and suppliers.
AP-ES-03-11-04 1929EST
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