Creditors of the bankrupt Great Northern Paper mill in East Millinocket have divvied up nearly $3 million in payments, with roughly $1.9 million going to the two financing firms that orchestrated a $40 million investment in the mill using a state tax credit program that will cost taxpayers $16 million.

Great Northern Paper was operated by New Hampshire-based private equity firm Cate Street Capital until late January 2014, when it idled the paper machines, citing high wood and energy costs. A few weeks later, it laid off more than 200 employees, and it filed for bankruptcy that September.

The case consists of two separate bankruptcies: GNP Maine Holdings LLC, which owned the mill and equipment, filed for bankruptcy on Sept. 22, 2014, followed a month later by GNP East Inc., which owned the land in East Millinocket.

Pasquale “Pat” Perrino Jr., the trustee appointed to oversee the bankruptcy case, organized an auction and sold the mill for $5.4 million on Dec. 5, 2014, to Hackman Capital Partners of Los Angeles, which continues to market the property to potential buyers. To date, the company hasn’t found “any credible party” to restart the mill, according to Sharon Kopman, Hackman’s senior vice president of acquisitions and legal affairs.

Creditors who have liens on specific property are considered secured creditors and first in line when funds are distributed from a bankruptcy. Creditors without liens are unsecured creditors, and get paid only if there’s anything left or if there’s been a specific “carve-out” to pay them back.

When Great Northern went bankrupt, its two largest secured creditors were Stonehenge Community Development LXI LLC and Enhanced Capital New Market Development Fund X, each with a $20 million lien against the mill property for the loans they provided to the mill in December 2012 as part of the Maine New Markets Capital Investment program.

A recent Maine Sunday Telegram investigation revealed that the majority of that $40 million investment, however, immediately flowed through Great Northern and other Cate Street subsidiaries and back to the original lenders in a single day, leaving the mill with $8 million, which it used to pay off old debt and cover closing costs.

However, because it wasn’t GNP Maine Holdings that paid back the loans, its debts remained on the books when it filed for bankruptcy.

When the trustee sold the mill in early December, the proceeds of $5.4 million were split between the two bankrupt entities. The GNP Maine Holdings estate received roughly $4.6 million, or 85 percent of the proceeds, while the GNP East estate received $810,000, or 15 percent.

Of the $4.6 million that went to the GNP Maine Holdings estate, $288,711 immediately went to the town of East Millinocket to cover unpaid tax bills; $1 million was set aside for administrative purposes, such as legal fees and utility bills; and another $1.4 million was set aside in the form of a carve-out to pay back the mill’s unsecured creditors.

That left roughly $1.9 million, which was distributed equally between Stonehenge and Enhanced. Randy Creswell, the trustee’s attorney, said those payments have been made.

The unsecured creditors, including many businesses in the Katahdin region that were never paid for goods and services, have yet to be paid from the carve-out because the trustee is going through claims to determine which are eligible, according to Creswell. Collectively, the unsecured creditors are owed $22.6 million, but they are likely to get only pennies on the dollar.

Perrino got Stonehenge, Enhanced and Cate Street to agree to a carve-out for the unsecured creditors after he said he had enough evidence to pursue claims against Great Northern’s directors and officers for breaching their financial responsibility in running the East Millinocket mill. While Perrino and Creswell wouldn’t go into detail at the time, their claims stemmed from the New Markets deal that the Maine Sunday Telegram later documented.

On the GNP East side of the bankruptcy, the trustee immediately distributed roughly $407,000 to the town of East Millinocket for unpaid taxes. In January, it also distributed roughly $317,000 to Northern Construction Services Inc. of Palmer, Massachusetts, and $33,000 to Lane Construction Corp. of Cheshire, Connecticut.

The town is still owed $143,594.80 in personal property taxes, according to Beverly MacLeod, East Millinocket’s treasurer.

“What’s left is taxes on personal property, which, lo and behold, is what’s disappearing,” she said Friday.

Creswell said the bankruptcy estate is preparing to hand over a wastewater treatment plant to the town and begin paying out funds to the unsecured creditors. Once those things are done, the bankruptcy case will be nearly ready to close, Creswell said.

“If we get this case done in one year, that would be fabulous,” he said.

And unusual. The original owner of the mill built it in 1906 and operated it until 2003 when it also filed for bankruptcy. That case is open and active. As of Friday, there were nearly 2,800 court filings in the docket, the most recent being filed on April 30.