June 26, 2008
Red Shield to file for bankruptcy
Red Shield Environmental, the company that purchased the former Georgia-Pacific mill in Old Town in 2006, plans to file for Chapter 11 bankruptcy today, according to the company's attorney.
Robert Keach of Bernstein Shur in Portland told Mainebiz that the company needs to address a "short-term liquidity crisis" caused by the rising cost of wood chips, fuel and chemicals. The mill has been closed since June 6 in a shut-down Red Shield at the time said would last only a few days. A skeleton staff of 30 of the company's total 165 employees are currently working at the mill to keep it ready for startup, though no restart date has been set. Red Shield's impending bankruptcy was first reported yesterday by the Bangor Daily News.
Keach said employees awaiting pay for last week's work could receive checks as early as Monday assuming the bankruptcy filing is approved by the court. Keach said Red Shield hopes the bankruptcy will allow it to refinance the business and replace its lenders, and that the mill will eventually reopen.
Robert Keach of Bernstein Shur in Portland told Mainebiz that the company needs to address a "short-term liquidity crisis" caused by the rising cost of wood chips, fuel and chemicals. The mill has been closed since June 6 in a shut-down Red Shield at the time said would last only a few days. A skeleton staff of 30 of the company's total 165 employees are currently working at the mill to keep it ready for startup, though no restart date has been set. Red Shield's impending bankruptcy was first reported yesterday by the Bangor Daily News.
Keach said employees awaiting pay for last week's work could receive checks as early as Monday assuming the bankruptcy filing is approved by the court. Keach said Red Shield hopes the bankruptcy will allow it to refinance the business and replace its lenders, and that the mill will eventually reopen.
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