FERC, Lincoln Paper & Tissue settle $5M lawsuit
The Federal Energy Regulatory Commission has settled its $5 million civil lawsuit against Lincoln Paper and Tissue LLC by agreeing to seek restitution for a lesser amount.
The Bangor Daily News reported that FERC agreed, instead, to place its claim for $379,016 in profits it alleges Lincoln Paper and Tissue illegally received in 2008 among other unsecured claims that came after the mill’s bankruptcy in 2015. The agreement’s details are contained in a 12-page filing released by the U.S. Bankruptcy Court in Bangor on Monday, the newspaper reported.
Lincoln Paper’s attorney D. Sam Anderson told the BDN those unsecured claims, at one point totaling $9.1 million, are still being negotiated by the estate as part of a liquidation plan that is expected to take several months to negotiate.
FERC’s 2012 civil lawsuit alleged Lincoln Paper manipulated a demand-response program administered by ISO-New England that paid end users to reduce their electricity consumption during peak hours — a charge the company and its consultants denied. Lincoln Paper filed for Chapter 11 bankruptcy last September, citing a November 2013 boiler explosion that ended paper production at the mill as a reason for the filing. Hopes for restarting the mill were dashed this spring when essential mill equipment were sold in auction.
Similar civil lawsuits were filed against Rumford Paper Co., which settled with FERC in 2013 for $3 million, and Portland-based consultant Competitive Energy Services, which is contesting FERC’s claims in federal court.
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