A union representing a portion of the workers at the Verso Paper mill in Bucksport has filed a federal lawsuit against the Memphis-based company in an attempt to block the sale of the mill to a scrap-metal company and open the way for a buyer that would keep the mill operating.

The Bucksport chapter of the International Association of Machinists and Aerospace Workers, which represents 59 hourly employees who work as mechanics at the paper mill, as well as five officers of the local union, filed the complaint Monday against Verso Paper Corp. and AIM Development LLC. The lawsuit, however, is intended to be on behalf of the roughly 540 employees at the mill.

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A lawsuit against Verso Paper Corp. seeks to stop the sale of the company’s Bucksport mill and force immediate severance payments to workers. 2014 AP file photo

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In October, Verso announced it would close the 84-year-old mill by the end of the year, citing high energy costs and decreasing demand for the coated and specialty publishing paper made at the mill. The mill produced its last roll of paper on Dec. 5, though the workers will be paid through the end of the year before being officially laid off. Included in the suit is also language to force the company to pay millions in severance immediately following the layoffs.

Employees had hoped that another paper company would step in to buy and operate the Bucksport mill, which has an annual production capacity of 350,000 tons of coated paper, the glossy kind used in magazines and catalogs. But Verso announced a week ago that it was selling the mill along with its attached power plant to AIM Development, a subsidiary of a Montreal-based metal salvage and recycling company.

Both companies have refused to discuss specific plans for the mill, but it’s widely believed that AIM will demolish it for scrap metal and redevelop the site for non-papermaking uses, according to the lawsuit.

The lawsuit, filed in U.S. District Court in Bangor, claims Verso’s stated objective to keep the mill out of a competitor’s portfolio is an attempt to limit the supply of coated paper on the market, and its plan to destroy the mill’s papermaking capacity to ensure there’s never a future sale to another papermaker “is an illegal conspiracy to monopolize the market for coated printing paper.”

The union argues that Verso is dispatching the Bucksport mill to help secure approval for a pending acquisition of a larger rival in the coated paper business, NewPage Holdings. That acquisition, announced in January, is currently under review by federal antitrust regulators at the U.S. Department of Justice. If approved, the new entity would control more than 50 percent of the market for coated paper in North America.

“The story behind the case is pretty straightforward,” Don Baker, an antitrust attorney working on behalf of the union, wrote in an email on Monday. Baker is the former antitrust chief at the U.S. Department of Justice. “Verso wants to scrap Bucksport to help it generate higher prices after the NewPage merger. The union’s suit seeks to thwart this anti-competitive strategy.”

Baker continued: “The antitrust claims essentially state that a company may not shut down and scrap a productive facility, in the context of a merger that would make it the market leader, without offering the facility for sale to some purchaser willing and able to continue to operate it as (a) continued source of competition and employment in the industry.”

Besides the Bucksport mill, Verso owns two other paper mills, including one in Jay. In total, before Bucksport’s closure, the company had the capacity to produce 1.3 million metric tons of coated paper. The closure of Bucksport has reduced that capacity by 26 percent, to 955,000 metric tons, according to the lawsuit.

The lawsuit claims Verso has “intentionally exaggerated” the unprofitability of the Bucksport mill through various financial maneuverings to convince federal antitrust regulators and Maine officials that closing the Bucksport mill “was a reasonable business judgment.”

Attempts to reach Verso for comment were not successful by press time Monday night.

The union is seeking an injunction that would temporarily prohibit Verso from selling the Bucksport mill to AIM or any other salvage company; require Verso to publicize the availability of the Bucksport mill for sale at a reasonable price to be determined by the court to any bona fide buyer willing to operate it as a paper mill; prohibit Verso from rejecting any offer to purchase the Bucksport mill from a buyer willing to operate it as a paper mill; prohibit Verso from taking any actions that would be inconsistent with the continued operations of the Bucksport mill; and prohibit Verso from selling or trying to sell the power plant separately from the Bucksport mill itself.

The union is also seeking an order forcing Verso to pay $30 million to $35 million in severance and vacation time owed to laid-off mill employees by Jan. 8, 2015, which would be in the next pay period after employees’ final paycheck, as required by state law. The company has argued that it doesn’t owe severance payments until three months after employees receive their last paychecks, which it claims is consistent with its collective bargaining agreement with its unions. Maine officials have threatened legal action if Verso does not comply with state law.

Kimberely Ervin Tucker, the union’s attorney, said Monday that Verso’s interpretation of the collective bargaining agreement “is utterly false.”

Tucker said the collective bargaining agreement clearly states that Maine law would supersede the provisions of the collective bargaining agreement.

“In the great rock, paper, scissors of the law, that has to be the case,” she said.

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