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Bankrupt Lincoln Mill Seeks to Clawback $1.1M From its Vendors

Maine, August 8, 2017 – As a part of the bankruptcy process, the Lincoln Paper and Tissue mill is purportedly gearing up to reclaim money that it has already paid out to several vendors before its bankruptcy filing. The bankrupt mill allegedly plans to file $1.1 million in claims against suppliers in Maine and elsewhere that it paid before filing for Chapter 11 bankruptcy protection. The largest claim, $552,396, is against Woodland Pulp. The other creditors include Sibley Transportation, W.T. Gardner & Sons, Winn-based trucking company H.C. Haynes and the Hermon-based Pottle’s Transportation. If the mill succeeds in its effort to clawback the alleged transfers from various vendors, the money will go back into the bankruptcy estate for potential distribution among its creditors.

The debtor-in possession, Lincoln Paper and Tissue, LLC has already had already filed some of its preference claims against vendors, including the South Carolina-based Sonoco Products Co. and Houston-based Honeywell Process Solutions. Earlier this week, the mill initiated clawback lawsuits against Sibley Transportation, Inc. and Bonetti Co. Inc. The pretrial conference is scheduled for October 3, 2017, in these cases.

Two years ago, the mill filed for Chapter 11 bankruptcy on Sept. 28, 2015, after the explosion of a recovery boiler that curtailed the mill’s ability to process its own wood pulp to make into paper. The company employed about 170 people in the production of speciality tissue for products like party napkins and medical tissues.