The trustee for bankrupt Great Northern Paper has received court permission to move forward on the sale of the equipment and buildings of the defunct mill in East Millinocket.

A company called GNP Acquisition has offered to buy the paper mill equipment and buildings for $2.6 million. The company is not interested in purchasing the land, but would have the option to buy it for an additional $350,000, according to Randy Creswell, an attorney at Perkins Thompson who is working for Pasquale J. “Pat” Perrino Jr., the trustee for Great Northern.

U.S. Bankruptcy Judge Louis Kornreich approved the sales agreement at a hearing Friday morning in federal court in Bangor.

GNP Acquisition is what’s known as a “stalking horse,” which is essentially an opening bid in an auction for a bankrupt company’s assets. If another party is interested in purchasing Great Northern’s assets, it would have to bid at least $2.9 million to beat GNP Acquisition’s position and $3.25 million if the offer included the land.

All competing bids on the assets are due Dec. 1, with a final sales hearing scheduled for Dec. 2.

If a higher bid does not come along, GNP Acquisition would buy the mill for the $2.6 million. The proceeds from the sale would be split between the two entities, both bankrupt, that make up Great Northern Paper. Fifteen percent of the purchase price, or $390,000, would be allocated to GNP East, which owns the real estate the mill sits on, while 85 percent, or $2.2 million, would be allocated to GNP Maine Holdings, which owns the mill buildings and equipment.

Great Northern Paper, which was managed by New Hampshire-based private equity firm Cate Street Capital, idled the paper machines at its East Millinocket mill in late January and a few weeks later laid off more than 200 employees. On Sept. 22 the company filed for Chapter 7 bankruptcy, meaning the company would pursue a liquidation of its holdings.

The East Millinocket mill produced paper for newspapers and paperback books, both markets that have come under pressure from foreign competition and the migration of readers from print products to those in digital formats.

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