The town of Jay is contesting a request by paper maker Verso Corp. that the company be allowed to move pending tax abatement requests to federal court as it goes through bankruptcy proceedings.
In a motion filed Wednesday, the town argued that moving the tax dispute to federal court in Delaware would neither provide a faster resolution nor help the company in its reorganization efforts.
The town also is arguing that the federal court does not have jurisdiction to determine tax disputes from 2013 and 2014, which predate the company’s federal bankruptcy case.
Verso, which owns the Androscoggin Mill in Jay, filed for bankruptcy in January and has three pending abatement requests with the town. In total, the company is asking for a refund of $11.4 million in taxes from 2013, 2014 and 2015. The town agreed to a partial abatement request of $886,157 of the company’s 2015 taxes last month.
Town Manager Shiloh LaFreniere said Thursday if the tax dispute is moved to federal court, it will require town officials to travel to Delaware and will be an added expense for the town.
“We just feel the Maine board has been set up here to hear these cases, and we feel it is a more appropriate place for the cases to be heard in the state of Maine,” she said.
In March, Verso asked a judge in federal bankruptcy court in Delaware to move its outstanding abatement requests to federal court in order to expedite their resolution and help in the company’s restructuring.
Verso has appealed the town’s valuation of its Jay facilities in 2013, 2014 and 2015 with the Augusta-based Maine Board of Property Tax Review. The board is scheduled to review the dispute in June. The board’s decision could be appealed to higher courts in Maine.
The town has agreed to the review but also argued in Wednesday’s filing that the company did not exhaust all opportunities to bring evidence to the town in support of its request for abatements.
The ongoing litigation follows recent layoffs at the Jay mill of about 300 people. The company, which owns eight paper mills around the country, announced plans earlier this month to close one of them in Wickliffe, Kentucky. The closure is not expected to affect operations at the Jay mill.
Rachel Ohm — 612-2368
Twitter: @rachel_ohm
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