The town of Millinocket has filed a lien against Great Northern Paper Co. in an effort to obtain more than $2 million in unpaid property taxes on paper mill equipment the company plans to sell at auction next month.

The town filed the Uniform Commercial Code Lien with the Maine secretary of state and the Delaware secretary of state on May 21, according to a news release from Millinocket Town Manager Peggy Daigle.

The lien specifically names GNP West Inc., the Great Northern Paper subsidiary that owns the idled mill in Millinocket. New Hampshire-based private equity firm Cate Street Capital manages Great Northern Paper, which bought the paper mills in Millinocket and East Millinocket for $1 in 2011. It never restarted the Millinocket mill, but operated the East Millinocket mill until late January of this year.

The company says it’s still trying to restart the East Millinocket mill, but the Millinocket mill is unlikely to reopen. Great Northern Paper is preparing to auction off the idled equipment in that mill, including its No. 11 paper machine. The auction is scheduled for June 19, according to Koster Industries, the New York-based company managing the auction.

The town sent lien notices to GNP West and Cate Street Capital, as well as Koster Industries and New York-based Jackson Demolition, which is conducting demolition on the site.

The UCC lien provides Millinocket with a first-priority position in its effort to collect the outstanding personal property taxes on the identified equipment. The notice also states that “any effort to move, remove or otherwise adversely impact or sell the property” identified in the town’s lien would have to be done in accordance with Maine law.

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“Basically, removal of personal property contrary to the notice filed and posted by the town is theft,” the town’s statement says.

It’s unclear if the town’s intention was to postpone or prevent the auction of the mill’s equipment. Daigle wasn’t available Wednesday to comment on the town’s lien.

Cate Street Capital responded to the lien with its own media release, in which a spokeswoman said the town’s actions will make it harder for Great Northern Paper to pay its creditors.

“The filing of the lien by the town of Millinocket … interferes with Great Northern Paper’s efforts to make creditors whole and get people working,” Cate Street spokeswoman Alexandra Ritchie said in the release. “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.”

According to the town’s statement, its UCC lien precedes the filing of a real estate lien on the remainder of the unpaid taxes owed to Millinocket by GNP West for the land and buildings. It is currently issuing the company a 30-day notice on that lien. It wasn’t immediately clear how much in taxes that lien would cover.

In April, the Internal Revenue Service filed two liens against GNP West and GNP East, which owns the mill in East Millinocket, alleging that Great Northern Paper failed to pay nearly $2.5 million in corporate income taxes in 2012.


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