Lincoln Paper and Tissue Files for Bankruptcy

by San Antonio Attorney

Lincoln Paper and Tissue LLC sought for Chapter 11 bankruptcy protection on Monday.  The company, which is based in Maine, has an estimated assets and liabilities from $10 million to $50 million.  The bankrupt business is expected to be auctioned within 45 days.

According to Lincoln Paper Tissue co-owner Keith Van Scotter, the company did not have enough resources to completely resolve the issues that cropped up with the boiler explosion in the chemical recovery area in November 2013.

The damage of the boiler was deemed too costly to replace, so the company ended up letting go around 185 of its workers.  They were also forced to stop paper production at the facility and had to purchase pulp from outside sources – these things led the company to file for bankruptcy.

For the past 3 years, Lincoln Paper has also has been dealing with the Federal Energy Regulatory Commission’s allegations that it unscrupulously controlled electricity markets.  The company has not admitted any wrongdoing.

The union, which represents 132 workers of the mill, is hoping that new ownership would allow the business to continue.

Lincoln Paper Tissue is a producer of paper and tissue products. It has been struggling to keep up with competitors and last month, it had declared that it would turn off one of its three tissue-making machines, which resulted in a layoff of more workers.  The company had completed about $10 million worth of upgrades in March.  It has installed a new $6 million turbine and condenser system that turned the mill into a self-sufficient electricity generator.

Based on court papers filed, the biggest unsecured creditor of Lincoln is energy company Constellation Newenergy.  It owes the creditor more than $1 million.

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