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Columbia Pulp ordered to relinquish assets to property manager in postponement of sale for debts

DAYTON, Wash. (From news reports) -- Columbia Pulp LLC, headquartered in Dayton, was ordered to hand over its assets to a property management group just a few days before a court order would have mandated an auction of the multi-million dollar pulp mill on the Columbia County Courthouse steps.

The company had until Friday, April 15, to pay off a debt of $758,490.97 plus fees to Pasco-based construction company DKB Inc.

After a lengthy closure just months after the mill opened in 2019 -- caused by the pandemic -- Columbia Pulp announced a shut down of its Starbuck mill in mid-February for an "undetermined length of time" to develop the market for its unique straw fiber alternative to wood.

A 60-day stay on the sale of the company is now in effect. UMB Bank, the bond holder, filed a motion with King County Superior Court requesting the appointment of a general receiver over Columbia Pulp LLC.

The court-ordered receiver operates as a postponement of the debt. Effective Tuesday, April 12, Lance Miller of Paladin Management Group LLC has been appointed general receiver and is responsible for all business affairs associated will Columbia Pulp.

A spokesperson for Columbia Pulp told the Union-Bulletin this week they were unable to speak on the matter because of legal restrictions. No one else could be reached for comment.

The pulp company is still liable for its financial obligations, according to court documents, but the collection of its debt is stalled while in receivership.

Paladin Management Group will take over the assets of the company and oversee daily operations of the plant. It also has control over the buildings and structures of the mill, the 40 acres it is located on, as well as the 409 acres of undeveloped land adjacent to the plant.

Miller, the general receiver, was ordered by the court to draft a plan for liquidation of the property.

A court-appointed receiver has no loyalty to either party named in the motion and is only obligated to follow the directives given by the court. This management group will eventually submit a report of its findings to the court before the court terminates the receivership and makes a final judgment.

Columbia Pulp has been directed by the court to comply and cooperate fully with the general receiver.

The pulp mill near the Snake River in northern Columbia County was long awaited. After more than a decade of planning and funds seeking, it was finally constructed in 2019 to be the first tree-free pulp mill in North America.

Its function was to process local agricultural waste -- such as leftover straw from wheat harvest -- and turn it into alternative fibers that would be used by paper-product and packaging manufacturers.

The plant has the capacity to process more than 250,000 tons of straw each year, giving farmers an alternative of disposing and recycling their straw instead of burning it.

Columbia Pulp was granted $20 million in New Markets Tax Credit financing for the construction of the mill. In addition, $134 million in tax-exempt municipal solid-waste bonds were also granted from the Washington Economic Development Finance Authority in 2015.

Columbia County granted the building permit for the facility in June 2016, and the 140,000-square-foot mill began operating in September 2019.

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