The Great Northern Paper Co. has filed for Chapter 7 bankruptcy in court in Delaware. This business, which is approximately 100 years old, used to produce paper for books, newspapers and other uses. They recently stopped operations at their last plant in Maine, according to the Portland Press Herald on September 29, 2014 and the Wall Street Journal on June 23, 2014. The company has noted that costs have risen.
Furthermore, the millâ€™s parent company, GNP Maine Holdings LLC, owes about 1,000 creditors between $50 million and $100 million. Court papers show that the company has the same amount of money in assets. Property taxes will not play into this bankruptcy. That is because a separate company, GNP East, owes property taxes.
There are two important facets to the story of this bankruptcy to understand. One is that the company chose to file for Chapter 7 bankruptcy protection of all the available chapters and that its creditors are pushing for the case to be moved to Maine.
In a personal Chapter 7 bankruptcy, most debts are erased, and the debtor is given a â€œfresh start.â€ Debts including student loans and government fines cannot be discharged. Corporations too can file bankruptcy under the same chapter, or set of laws that govern how that type of bankruptcy works. When a corporation files a Chapter 7 bankruptcy, we typically call it a â€œliquidationâ€ bankruptcy. That means that the company will sell all of its assets to pay its creditors the best that it can after negotiations and then the corporation will close and go out of business. When a company files a Chapter 11 bankruptcy, they restructure themselves and their debt, but continues to operate during and after the bankruptcy. These are rather important distinctions.
Next, it is interesting that creditors are trying to have this case moved to Maine. Even though the company is incorporated in the State of Delaware, its assets and even some of its creditors are located in Maine where the company is headquartered. Creditors that support this includes a transportation company, a logistic company, two Maine municipalities, unions and the Maine District Attorneyâ€™s Office. We shall see if the court changes the venue of the bankruptcy in the upcoming days or weeks.
If you are considering filing for a personal bankruptcy, then you should speak to an experienced attorney to review your options whether you are behind in your mortgage, or you have credit card debt only. Jayson Lutzky is Bronx, New York lawyer who offers free in office consultations. He has over 31 years of experience and has represented many highly satisfied clients filing bankruptcy over the years. Call 718-329-9500 or 800-660-5299 to set up a confidential appointment. Visit www.MyNewYorkCityLawyer.com where you will find more information on the law and bankruptcies.