Potential buyers of the idled East Millinocket paper mill – both those interested in selling the assets as scrap and a few “tire-kickers” who may be interested in restarting the mill – have begun submitting bids, according to the trustee of the bankrupt Great Northern Paper.

“I’m in the early stages of evaluating those bids,” Trustee Pasquale “Pat” J. Perrino Jr. said Thursday. He would not provide any additional detail about the size of the bids or the parties involved, citing confidentiality agreements.

A storage facility sits empty in July at Great Northern’s East Millinocket paper mill. 2014 Press Herald File Photo

The bids being submitted are not part of the formal auction process. The initial bids are prospective “stalking horse” bids, which are used in bankruptcies to provide an opening bid that sets a bar so no other bidders can low-ball the purchase price.

Perrino said he hopes to have a stalking horse selected in the next two weeks. Beyond that, he couldn’t predict when a formal auction would begin, or even if there will be an auction. He said the stalking horse, once it’s selected, could attract a committed buyer and make the need for an auction moot.

Perrino wouldn’t say how many of the bidders want to sell the mill and its two paper machines for scrap. He did, however, acknowledge there are some bidders interested in buying the mill to make paper.

“We do have a few tire-kickers for the whole shebang, but I just refer to them as tire-kickers right now,” Perrino said.

Great Northern Paper, which was managed by New Hampshire-based private equity firm Cate Street Capital, idled the paper machines in late January and a few weeks later laid off more than 200 employees. The company continued to maintain a skeleton crew at the mill to keep it ready for a potential restart. As recently as July, company officials were voicing confidence that it would restart.

However, the company on Sept. 22 filed for Chapter 7 bankruptcy, meaning the company would pursue a liquidation of its holdings. A Chapter 11 filing would have indicated an attempt to reorganize and continue doing business.

The mill’s struggles to remain profitable are well known. The East Millinocket mill produced paper for newspapers and paperback books, both markets that have come under pressure from foreign competition and the migration of readers from print products to those in digital formats.

Perrino, who as trustee has full access to the company’s books, confirmed those reasons for the mill’s bankruptcy.

“There’s no call for that kind of paper any more,” Perrino said. “You’ve got newsprint and who the hell reads the newspaper anymore? I could pick up my phone and download tomorrow’s news tonight.”

As trustee, Perrino’s duty is to the creditors who are owed more than $65 million. That means that if the highest bid for the property is from a party who wants to demolish the mill and sell it for scrap, that is the direction he will be forced to take.

“I would like to get the mill restarted for the purposes of the town itself – there’s no business up there,” he said. “That’s my first goal, but if I can’t do that, I can’t.”

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