A buyer for the Park Falls mill was approved in Price County Court Monday, but it’s unclear if the company will resume operations at the shutdown plant.
Niagara Worldwide has until Nov. 13 to close on a deal to purchase the Flambeau River Papers mill. At $2.2 million, the firm was the highest bidder in an auction that concluded Sunday.
Niagara is a facilities operations and manufacturing company headquartered in Niagara, Wisconsin. The company also lists property redevelopment, commodities trading, asset liquidation, equipment acquisition, construction, and remediation as areas of specialization on its website.
A company rep for Niagara did not immediately return calls or email on Tuesday.
Park Falls Mayor Michael Bablick said Tuesday that while nothing is set in stone until the paperwork is filed, he was glad to see the receivership process come to an end and the city hopes to learn more about the company in the coming days.
“We will work with them as much as we can .... to get as much of the mill operating in the shortest amount of time to restore employees back to the mill, but they did not submit a business plan with this offer,” Bablick said. “We don’t truly understand what exactly what they want the mill for at this point.”
Bablick said the limited contact he has had with the company so far has indicated Niagara may be interested in operating a portion of the mill.
“It seems like they’re interested mostly on the pulp production side. But, I don’t know what exactly that means until we see workers there."
He said there was no known timeline for any possible operation.
The sales process was the second since Flambeau River Papers entered receivership in May with over $40 million in debt. The court conditionally approved new company Element Ventures to purchase the mill in September but that deal fell apart just a couple weeks later when Element Ventures failed to rectify a contingency in the purchase agreement.
This time, the mill was marketed for liquidation and garnered five qualified bids, ranging from Niagara’s high of $2.2 million to a low of $350,000.
If Niagara’s winning bid fails to close, the second-highest bidder has an opportunity to purchase the mill. Industrial Assets Corporation submitted the second-highest bid at $2.1 million.
In approving the purchase agreement, Judge Kevin Klein said it was important to keep in mind the timeline and opportunities for the mill to sell at a higher value. Testimony established over 300 buyer groups had been contacted, including those since before receivership had started, going back to a year ago.
“The court believes liquidation value is now the rule of this case. If we were to have unlimited time, unlimited resources, perhaps there could be ongoing sale efforts indefinitely into the future. That’s not the reality of the situation,” said Klein.
“The hope, of course, is that Niagara may go ahead with operations, even if limited in scope, though the value for purposes of the proposed sale is really liquidation value."
The mill has been kept in a warm shutdown state since production operations ceased at the end of September. Doing so has required 20-23 employees to continue working on-site, ensuring the mill is maintained, but funds to keep employees at the plant are not projected beyond next week.
“From what I gathered … if the deal fell apart, if they were to go into abandonment, there would be virtually no money left to pay employees to process the remaining environmental liabilities on site,” said Bablick. "My greatest concern in the abandonment of that facility is environmental issues. If such a thing would happen, I would be moving very aggressively with the Department of Natural Resources to try to come up with a solution to make sure that nothing undesirable would happen to the river that is frankly the lifeblood of our community.”