USK, Washington (From news reports) -- The Ponderay Newsprint mill, which had been one of the largest employers in Pend Oreille County before it shut down, could be sold at auction in April, according to court records. A federal bankruptcy judge on March 18 will consider a motion by Trustee John Munding to sell the sprawling property near Usk during an auction April 23.
However, a deal to sell the property may be reached prior to that. Munding said he is still working with potential buyers of the 927-acre property, which consists of 29 buildings and storage facilities and is adjacent to the Pend Oreille Valley Railroad and Pend Oreille River. It was listed for sale in December for $11.5 million. "We have a lot of interest," Munding said.
"And this process should bring bona fide offers to the table." Munding said he could not discuss any current negotiations with potential buyers "because some of them are still ongoing."
The potential auction is the latest development in a process that started when the mill's owners filed for Chapter 7 bankruptcy relief and closed in June. The operation was owned jointly by Lake Superior Forest Products, a subsidiary of Quebec-based Resolute Forest Products, and five major U.S. publishers. The Kalispel Tribe of Indians earlier had expressed interest in purchasing the mill and submitted a bid. But it was turned down in October. Kalispel spokeswoman Afton Servas could not immediately be reached Wednesday for comment on whether the tribe would submit a new bid if the mill goes to auction.
Munding said the goal is to find a purchaser who would reopen the plant, which had operated since 1989 and could be converted into making molded fiber or linear board.
"Ideally, it will be a purchaser who will repurpose the mill for future use," he said.
The land and buildings have a combined assessed value of more than $59 million, according a recent property tax statement from the Pend Oreille County Treasurer's Office.
In his motion for auction, Munding asked that the judge approve a process by which those who bid on the property deposit $350,000, which is refundable, with a minimum bid of $7.5 million.
While Munding could not comment on the negotiations, he wrote in court records that he had received one offer to purchase the mill "but the offer was early in the proceeding and deemed insufficient to realize the value of the assets." Munding later received two "non-binding" offers to purchase the mill for $11 million or more but he was unable to reach "viable" purchase agreements.
On Dec. 2, Munding hired NAI Black Co. broker Chris Bell to market the property and send electronic mailings to thousands of prospective buyers.
"Despite the extensive efforts of (Munding) and Mr. Bell to sell the assets a purchase and sale agreement has not been achieved at this time," court records state.
The bankruptcy estate continues to employ a skeleton crew at the plant site to maintain the equipment and prevent theft.
"The mill is being cared for and the people who are assisting me are tremendous to work with," Munding said during an interview. "I'm very pleased with the employees that stayed."
However, Munding noted in court records it is costing the estate about $198,000 a month to maintain and market the facility.
The cash on deposit used to preserve the facility will be completely spent by May. Munding "has determined that it is in the best interest of the bankruptcy estate and its creditors to proceed with an auction of the assets," according to court records.