The world is constantly changing and is now moving at a significantly faster rate than in the past. This is why many people in Maryland and other states become upset when a historic business decides to close its doors. One town in the Northeastern United States is now feeling this way after learning that the local paper mill company which had been operating since 1907 has now filed for Chapter 7 bankruptcy, which will result in asset liquidation.
Creditors have been attempting to force Great Northern Paper into liquidation bankruptcy by filing a petition with a federal Bankruptcy Court. The town government in which the company is operating is also considering placing a lien on the business for past due taxes. The town has a deadline of mid-October to file a lien on the company for approximately $670,000 due.
However, the company is still trying its best to stay in business with hopes of potentially finding an investor to purchase the business. The company has been a major employer for the town since it began. Since encountering its current financial problems, the company has laid off over 200 employees. Currently, the company is operating with only a staff of approximately 40 workers.
As the paper mill continues to search for answers, the Chapter 7 proceeding will be addressed in Bankruptcy Court. One possibility is that an investor could emerge to purchase part or all of the company as part of the asset liquidation process. This may be seen as the best opportunity for existing creditors to maximize the company’s liquidation value. As with similar bankruptcy proceedings in Maryland, this may allow the company to continue under new ownership in some fashion, with the clear goal of continuing to provide jobs in the region and products for faithful customers. It will also allow the current company owners and executives to re-enter the marketplace with a view toward future investment opportunities.
Source: mpbn.net, “Great Northern Paper Files for Chapter 7 Bankruptcy”, Keith Shortall, Sept. 23, 2014
