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Bedard and Sons Ask for More Money from GNP Estate

BANGOR -- Lambert Bedard, the former owner of Great Northern Paper Company, and his sonís consulting firm, have filed separate invoices to the court for expenses occurred during the first month after GNP filed for bankruptcy protection.

Bedard and sons are asking the U.S. Bankruptcy Court for more than $130,000.

The GNP board of directors, headed by Bedard, filed for bankruptcy on January 9, 2003, more than a month after it quit operations at its mills in Millinocket and East Millinocket, furloughing more than 1,100 workers.

The mills were purchased by Brascan Corp, of Toronto, which restarted the East Millinocket mill under the name of Katahdin Paper Company earlier this month, reemploying about 400 workers.

Bedardís invoice, prepared by Inexcon Maine, the parent company of Great Northern Paper, lists expenses including office, travel, hotels, meals, and cars, totaling $37,776 for 20 business days between January 9 and February 5, 2003.

The interim management team, consisting of Jim Giffune, Warren Richardson, and Thomas Griffin, approved by the court on February 5, agreed to work without wages.

Invoices by Bedard also include $38,547 for management and consultant services between January 9 and May 23. The company is also asking for $54,000 as an early termination fee.

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If approved by the court, the invoices would be paid from any remaining proceeds of the sale of the Katahdin area mills. Although Brascanís package was valued at $103 million, only about $60 million was in cash, which was paid to secured creditors. It is expected that no funds will be available for unsecured creditors.

Bedard is seeking to have his invoices classified as administrative expenses similar to those incurred by lawyers, consultants, or others who operated the business after the bankruptcy petition had been filed.

Judge Kornreich put $2 million of the proceeds of the sale aside to cover administrative costs, which would include legal and consultant fees.

In separate action, the bankruptcy trustee appointed to oversee the disbursement of funds from the sale of Great Northernís assets has found that there appears to have been preferential treatment shown to various GNP creditors, including:

  • Inexcon Maine, owned by Lambert Bedard;
  • Inexcon Technology, owned by Bedardís son-in-law; and
  • Bilodard Inc., owned by Bedardís son, Martin; and
  • Cabadi Inc., which is owned by another of Bedardís sons.
  • Maine Timberlands Company, which was spun off of GNP in January, 2001, in a deal thought to protect its controversial arrangement with the Nature Conservancy.

In addition, there were significant bonuses issued a week after GNPís board of directors voted to seek Chapter 11 bankruptcy protection.

Inexcon Maine was paid $13,773,380 during this 90-day period, while Inexcon Technology received $164,350, Bilodard $153,891, with $93,317 going to Cabadi, Inc.; and $506,768 to Maine Timberlands Company.

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