25 May 2018: Motion to Sell Filed in Bankruptcy Court

And we’re off! On May 22nd after weeks of preparation, Bankruptcy Trustee Jeffrey T. Piampiano, Esq. has finally filed with the United States Bankruptcy Court a Motion to Sell the Clary Lake dam to the Clary Lake Association. The Trustee also filed at the same time a “Notice of Sale and Invitation to Bid Motion” and a “Motion for Substantive Consolidation” (more about this later). A hearing has been scheduled for June 7th at 2:00 PM at the United States Bankruptcy Court at 537 Congress Street in Portland Maine to consider the proposed bid procedures and act on the Motion for Substantive Consolidation. Objections to the motions must be filed by June 5th. A hearing date for the Sale Motion proper will be set at the June 7th hearing for sometime later in June, presumably also in Portland, though that remains to be seen. All of these hearings are open to the public should you want to attend. I’ll post the Sale Motion hearing date, time, and place as soon as it has been scheduled. Assuming the Judge approves the Sale Motion, we should own the Clary Lake dam before the end of June 🙂

The original plan had been to file the necessary motions on May 17th which would have resulted in a hearing on June 14th, a regularly scheduled hearing date for the Bangor Bankruptcy Court where this case was initially going to be heard. However, given the complexity of this proposed sale and for various other reasons, our attorney and the Trustee thought it would be better to bring the matter before the Judge in 2 parts, rather than try to fit everything into a single afternoon session which would very likely have resulted in the case being continued, with additional delays. To facilitate this, a Status Conference was held with U.S. Bankruptcy Court Judge Michael A. Fagone on Monday May 21st to discuss the filing of these motions and the scheduling of the hearings. The status conference was attended by Clary Lake Association attorney Randy Creswell, Jeffrey T. Piampiano Esq. representing Paul Kelley’s bankruptcy estate, J. Scott Logan Esq. representing the debtor Paul Kelley, and Assistant Attorney General Kevin J. Crosman Esq. representing the Maine DEP. The motions were filed the next day. The Maine DEP is fully supportive of our initiative to buy the Clary Lake dam.

Regarding the Motion for Substantive Consolidation: since the dam is actually owned by Pleasant Pond Mill LLC and it is Paul Kelley who is currently in bankruptcy, the trustee has filed a “Motion for Substantive Consolidation” requesting that the Court dissolve Pleasant Pond Mill LLC and bring it’s single asset (the Clary Lake dam) into Paul Kelley’s bankruptcy estate. “Substantive Consolidation” is a relatively routine procedure in many bankruptcy cases which is used to collect separate but related entities into a single bankruptcy estate. The motion spells out the specific legal basis for doing this with PPM along with considerable supporting case law. Pleasant Pond Mill LLC if you will recall already went through its own bankruptcy proceeding last year (see: “22 March 2017: Pleasant Pond Mill LLC Files For Bankruptcy” and “25 March 2017: Update on Pleasant Pond Mill Bankruptcy Filing“).

Regarding the Invitation to Bid filing: the sale of assets by a Bankruptcy Court are accomplished by public auction and the “Notice of Sale and Invitation to Bid” spells out the specific terms of the auction. While the basic bid procedure is more or less routine, the specific terms of any given auction are tailored to the specific case. The bid procedures spelled out for the Clary Lake dam are very complicated and I will NOT go into in detail trying to explain what it all means except to say that the Clary Lake Association’s offer (bid) for the Clary Lake day, being the first (and very likely the only) bid for that asset, affords us special protections.

Let me make one thing perfectly clear before going any further: we do not expect anyone else to bid on the dam. I can’t imagine anyone besides the Clary Lake Association wanting to own the dam a) knowing that it needs substantial, costly repairs, b) knowing that it is subject to a Water Level Order recently affirmed and upheld by the Lincoln County Superior Court which will be administered by the Maine Department of Environmental Protection and c) who happens to have the money laying around to out bid us. It’s just not going to happen folks. We’re driving this process, we want the dam, and it’s going to happen.

Here is the Invitation to Bid, the Motion for Substantive Consolidation, and the Motion to Sell:

There are 4 exhibits (A through D) attached to the Motion to Sell which you may or may not find interesting, and various other notices that were filed along with the motions, and some proposed orders (which are really only interesting AFTER the judge has signed them). Here is a link to a directory with all the May 22nd Bankruptcy Court filings. I’ll add additional files and response briefs to the directory as they become available.

These motions and the other filings are the result of a tremendous collaborative effort between CLA’s attorney Randy Creswell Esq. and Bankruptcy Trustee Jeffrey T. Piampiano Esq and represent a great deal time and effort. This is not your mother’s bankruptcy sale!

My apologies for not getting this information posted sooner but I’ve been a little busy! Here’s hoping everyone has a great Memorial Day weekend! Stay tuned for updates!