PORTLAND, Maine: A federal bankruptcy judge has approved the sale of the idle Old Town pulp and paper mill to a New York investment group for nearly $19 million.
Patriarch Partners plans to reopen the Red Shield Environmental mill
Patriarch provided no timetable but said it hopes to get the mill up and running as soon as possible.
“This is what we do. We buy and help rebuild, turnaround middle market companies, for the most part, based in the US,” said Bo Williams, one of the investors.
The sale occurred at an auction in which the minimum bid was expected to be $11.5 million, said Bob Keach, an attorney representing Red Shield.
The mill had a workforce of more than 400 when Georgia-Pacific shut it down in March 2006. Red Shield then acquired the mill and resumed pulp production as part of a business plan that called for the reactivation of a 16-megawatt biomass boiler and the eventual conversion of production to cellulose-based ethanol.
But Red Shield and its subsidiary, RSE Pulp & Chemical, laid off 160 workers and filed Chapter 11 bankruptcy in June, a move that the company blamed on sharp increases in the cost of fuel and materials.
A $30 million grant from the US Department of Energy to start ethanol production will transfer to the new owner when the sale is finalised.