IRS places liens on Great Northern Paper
The Internal Revenue Service has filed two liens totaling $2.49 million on companies owned by Cate Street Capital that are linked to the Great Northern Paper Co., adding additional uncertainty to the future of the East Millinocket paper mill that’s been closed since February for a “restructuring” of its papermaking operations in the face of rising energy and production costs and declining prices for its paper.
The Bangor Daily News reported that the IRS filed liens Thursday at the Penobscot County Registry of Deeds against GNP West Inc. for $1.43 million and against GNP East Inc. for $1.05 million. The first company was formed to operate an industrial park in Millinocket and the other is listed as a co-licensee on state environmental permits for the paper mill in East Millinocket, the newspaper reported.
An IRS spokeswoman told the newspaper that the liens were for nonpayment of corporate income taxes for the 2012 fiscal year.
Besides the IRS liens, Cate Street and/or its subsidiaries owe $2.3 million in property taxes to Millinocket and $657,9000 in property taxes to East Millinocket. Vendors also have filed liens in Penobscot County for unpaid bills totaling $1.32 million and have been paid $117,587, the newspaper reported.
The newspaper also reported that Prentiss & Carlisle Management Co. of Bangor sued in Bangor District Court and was awarded an attachment on GNP property totaling $426,678 and that AV Terrace Bay Inc. of Ontario is owed $407,127 and filed its lien on March 19.
Last Thursday Cate Street Capital developers told Millinocket town officials that they plan to pay overdue property taxes within three months and would be seeking approval for a $25 million loan from the Finance Authority of Maine this week for a $140 million pellet mill in Millinocket. Cate Street is also trying to negotiate a revenue-sharing deal with Brookfield Asset Management, which supplies the company's Great Northern Paper mill in East Millinocket with electricity. Harold Pachios, an attorney for Brookfield, said his client had responded to Cate Street's latest proposal, but declined to comment on the state of those negotiations.
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