Posted inBusiness
Red Shield hearing delayed in $13.6 million aid request
by Jessica Bloch September 3, 2008
OLD TOWN, Maine — A hearing on Red Shield Environmental LLC's request for $13.6 million in funding has been postponed to Sept. 15.
U.S. Bankruptcy Judge Leron H. Kornreich approved the postponement Friday. The hearing was to have taken place Tuesday at U.S. Bankruptcy Court in Bangor. It was the sec-ond time the hearing was post-poned.
Red Shield attorney Bob Keach said the court also on Tuesday approved a $550,000 loan to keep the facility idle.
Red Shield Environmental LLC and its subsidiary RSE Pulp and Paper, needed the delay because the companies want more time to work with the Finance Authority of Maine and its state loan program.
"We're continuing to work out issues with the FAME staff regarding the FAME guarantee of the larger borrowing," Keach said of the $13.6 million loan.
The $550,000 will help the company get through the weeks before the Sept. 15 court date, and if the funding is approved, the time after that is needed to get the facility up and running.
"It takes us essentially to the end of the month," Keach said.
If everything goes through, employees could be back to work by the end of the month, he said.
Funding approval would al-low Red Shield and the affili-ated RSE Pulp & Chemical to borrow money from Woodside Capital Partners of Massa-chuetts, a group that assists companies that are having fi-nancial difficulties and plan to restructure.
The final bankruptcy hear-ing initially was scheduled for Aug. 20 but was postponed to give all the parties time to work out more details. After the hearing was postponed, Korn-reich approved a loan of about $220,000 to keep the mill idle until Tuesday's scheduled hear-ing.
Red Shield also received a loan of roughly $1.25 million in July to help pay about 160 em-ployees who were laid off when Red Shield and RSE filed for Chapter 11 bankruptcy protec-tion in June. Around 30 em-ployees are working at Red Shield, the site of the former Georgia-Pacific mill, to keep it running at a base level.
jbloch@bangordailynews.net
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