BANGOR — A federal judge has denied a union’s request to block Verso Paper Corp.’s sale of its idled Bucksport paper mill to a Canadian scrap metal recycler because of antitrust concerns.
U.S. District Judge John A. Woodcock Jr. issued the ruling Tuesday afternoon, several hours after concluding a morning hearing in Bangor with the parties in the case. Woodcock’s decision clears the way for Verso to sell the Bucksport mill, which it closed in December, and its attached power plant to AIM Development LLC, a subsidiary of American Iron and Metal, a Montreal scrap metal recycler. The sale price is $58 million.
READ THE JUDGE'S ORDER ON BUCKSPORT MILL
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The Bucksport chapter of the International Association of Machinists and Aerospace Workers had filed a lawsuit Dec. 15 seeking an injunction to halt the sale of the mill and create an opportunity to find another buyer that would continue to produce paper, preserving more than 500 local jobs.
The union, which represents 59 former hourly employees at the mill, argued that Verso’s plan to sell the mill to AIM Development violates antitrust laws and is an illegal attempt by the company to limit the supply of coated paper on the market. The union claims Verso ignored legitimate inquiries from companies interested in purchasing the mill and continuing to operate it as a paper-producing facility.
DEFENDANTS: DELAY COULD KILL DEAL
Verso laid off more than 500 workers when it closed the mill, citing high energy costs and a shrinking market for the glossy paper used in magazines and catalogs that it produced.
Verso and AIM Development, which were both defendants in the union’s lawsuit, denied that their sales agreement violated antitrust laws and argued that the union failed to provide the necessary evidence to suggest otherwise. They argued that a court-imposed halt to the sale could kill the deal. AIM Development claimed it had already invested $200,000 in it, “which will be unrecoverable if the deal does not close.”
Although Woodcock concluded the union had “standing” to assert its claims under federal antitrust laws, he determined it had not “met (its) burden to prove” Verso had violated federal antitrust laws with its agreement to sell the mill to AIM Development.
John Carr, a spokesman for the machinists union, said the union is “truly disappointed” by Woodcock’s decision.
“We are conferring with our legal counsel on how, and if, to proceed,” he said.
COMPANIES’ LETTERS SET ASIDE
An 11th-hour effort to introduce other prospective buyers for the mill came in the form of letters to the court from Gov. Paul LePage; his senior forest products adviser, Rosaire Pelletier; and from three companies – Kejriwal Singapore International of Mumbai, India; Minimill Technologies of Syracuse, New York; and Fibre Technologies of Reading, Pennsylvania – that expressed interest in purchasing the mill and operating it to make paper. The letters, dated Jan. 16 and Jan. 19, were received after the record was officially closed, did not come from the union’s lawyer and were addressed directly to Woodcock.
At Tuesday morning’s hearing, Woodcock determined they could not be considered in the motion because they were not entered into the court record in official affidavit form. Woodcock denied a request from Kim Tucker, the union’s attorney, for time to obtain the letters as affidavits for fear it would devolve into a “catfight.”
OTHER PARTIES’ INTEREST ‘VAGUE’
In his ruling, Woodcock elaborated on the weight of the letters.
“As regards the letters from prospective buyers, each is an expression of interest, not an offer, and each is too vague to change the facts upon which the court must base its order,” Woodcock wrote. “Even if these letters were submitted in affidavit form, they would not change the court’s decision.”
Regarding the letters from LePage and Pelletier, Woodcock wrote that he “respects and appreciates” the letters’ contents, “but neither, even if true, changes the merits of the pending motion.”
The machinists union is especially disappointed that Woodcock didn’t give more weight to “the resounding call from the governor’s office and others that Verso was not being completely candid in revealing the existence of potential buyers for the Bucksport mill,” Carr said. “This fight is about the working families in and around the Bucksport mill, preserving the good jobs and the community of Bucksport.”
JUDGE HOPES FOR DEAL, REOPENING
Despite his ruling, Woodcock made known that he hopes the parties sit down and try to negotiate a “global settlement” that would be acceptable to all parties, and potentially lead to the reopening of the mill. He mentioned that hope several times during the 30-minute hearing Tuesday.
“In an ideal world, it seems to me there’d be some way to put everybody in the same room and you might actually emerge, if you were able to do that, with a deal that cuts the Gordian knot here,” Woodcock said, referencing the metaphor for solving an intractable problem.
He reiterated that hope in his written order.
“The court continues to offer the possibility of court mediation if the parties later conclude that such a global mediation would be helpful,” he wrote.
Clifford Ruprecht, AIM’s attorney, said Tuesday morning that nothing is stopping these interested buyers and other interested parties, including the governor’s office, from sitting down with his client once it has officially purchased the mill to discuss a sale to a company that will operate it to make paper.
“AIM strongly believes that the contract entitles it and no one else to sell the mill to any new buyer, and if there’s profit to be made on the sale of the mill, AIM should earn that profit,” Ruprecht said. “Right now the obstacle is the pending motion.”
With that motion now dismissed, Verso and AIM Development expect to close the sale as soon as possible.
Whit Richardson can be contacted at 791-6463 or at:
Twitter: whit_richardson
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