Cate Street Capital to go forward with plans to build US$140M specialized wood pellet mill, restart Great Northern Paper mill in Maine's Katahdin region despite complications caused by US$2.2M lien against company filed by Millinocket, Maine
May 28, 2014
(Bangor Daily News)
– The town's lien seeking $2.24 million in delinquent property taxes from a local paper company managed by a New Hampshire investor "interferes with" but won't stop the investor's efforts to revitalize the Katahdin region, according to a company spokeswoman.
Cate Street Capital officials will continue working to restart an East Millinocket paper mill and launch a $140 million specialized wood pellet mill in Millinocket, Cate Street Capital spokeswoman Alexandra Ritchie said in a statement Wednesday.
"The filing of the lien by the Town of Millinocket, combined with the inaccurate and misleading press release, interferes with Great Northern Paper's efforts to make creditors whole and get people working," Ritchie said.
"While Cate Street will continue to persevere in our efforts to revitalize the region, the town of Millinocket's actions against GNP West continue to make these efforts more difficult," Ritchie added.
Town officials decided to file the lien despite assisting Cate Street in redeveloping the former paper mill site upon which the specialized pellet mill would be located due to "conflicting information [from Cate Street leaders] that has caused concern from the Town Council," Millinocket Town Manager Peggy Daigle said in a press statement released Tuesday.
"The overriding issue that remains to be addressed is the municipal officials' concern for the taxpayers who live in Millinocket and expect the town to function and provide necessary services to all citizens. Once the taxes are paid, all liens will be released by the town, without prejudice," Daigle added. "The Town Council recognizes that taxes paid by the residents, businesses and industries is the price one pays to live in an organized and civil society."
The Uniform Commercial Code lien, filed with the Maine and Delaware secretaries of state May 21, includes $2,171,333 in unpaid property taxes and $76,428 in interest and filing costs Great Northern Paper West owes, Daigle said. The GNP West property includes the No. 11 paper machine and other equipment on the paper mill site.
GNP West and Cate Street are also registered as Delaware corporations.
The lien gives the town first priority position to collect its taxes. It states the relocation, removal or any effort to "otherwise adversely impact or sell the property" must comply with the commercial code, according to Daigle's press release.
"Basically removal of personal property, contrary to the notice filed and posted by the town, is theft," the release states.
Daigle's release incorrectly describes GNP as a wholly-owned subsidiary of Cate Street, according to the investment firm.
"Cate Street Capital is the management company of GNP, but maintains no ownership in these entities. Furthermore, Cate Street Capital is also one of the largest creditors of GNP," Ritchie said in the statement.
It was not clear whether the lien would prevent the auction of the No. 11 machine and related equipment scheduled at the East Millinocket GNP mill June 19. Daigle referred comment on the lien's impact on the auction to the town's attorneys, who did not return a telephone call Wednesday.
In addition to GNP West and Cate Street, notices of the lien were sent to the auction company, Koster Industries of Farmingdale, New York, and Andover, Massachusetts, conducting the sale of the personal property at the GNP West operations, as well as Jackson Demolition of Schenectady, New York, which is conducting the demolition of the mill property.
Cate Street is the investor that bought the East Millinocket and Millinocket paper mills for $1 in September 2011 and established GNP and Thermogen Industries, the company that has proposed replacing the paper mill with a $140 million pellet mill in the Katahdin Avenue industrial park.
The Millinocket mill never reopened after being purchased by Cate Street.
GNP companies owe at least $6.8 million in unpaid taxes and other debts to the Internal Revenue Service, East Millinocket and Millinocket, and several vendors, according to liens filed at the Penobscot County Registry of Deeds since mid-April.
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