By Naomi Hatch
“We want to revitalize the site and bring new industry in to us,” Snowflake Town Manager Paul Watson advised the town council last week regarding the sale of Catalyst’s Snowflake paper mill. “Those are exactly the goals we have.”
In his manager’s report at the Dec. 11 council meeting, Watson gave a brief update on “what’s happening with Catalyst and, more importantly, what’s happening with the sale and the potential future of the railway.”
He noted that the final bids for the paper mill were to be submitted by Dec. 7, and there is one additional step, a public auction at Catalyst’s attorney’s office in New York City, which was scheduled for Dec. 17.
“At that point bidders can attend the auction and make a bid above their written bid,” he explained, noting it is Catalyst’s intent to take those bids and approach the courts today (Dec. 19) to request court approval of the final sale.
“Where we are at in the process is, we filed a motion a little over a week ago that was a request to remove the railway from the bankruptcy proceedings,” Watson said, explaining that attorneys for the town did not see any language in the bankruptcy proceedings that allowed the sale of a railway.
“They filed a countermotion last week within a few days of our motion, basically trying to dismiss our motion on a number of grounds, but none of them included that the rail should not be included in a Chapter 15 bankruptcy,” explained Watson.
“In the meantime, there have been volumes of e-mails, conference calls and discussions trying to work an agreement,” he said. “Again, our ultimate goal as a community is the long term viability of that rail because we see it as a major asset.”
Watson said that they know of one bid for an industry that will not come without the rail being there.
“It is our intent at this point to file a motion tomorrow (Dec. 12) in protest of the sale and in essence because we have not received any security that the rail will continue to operate,” he said, explaining that Catalyst officials had said they would give the town some security that the rail will stay.
There will be a representative of the town at the New York auction and at the court hearing in Delaware.
“In a nutshell, we are still definitely in the hunt,” said Watson, noting he had a call the previous day from a potential bidder who requested an extension to file a bid to give them time to talk with Snowflake town officials. “I had a good conversation with two gentlemen, one in New York and one in Washington, D.C.,” said Watson. “They were very interested to learn that our interest is in the continuation of the rail and they feel strongly that it is important also.”
Watson said they were hoping to put the pieces together and submit a bid, then continue to work with the town to keep the rail going.
He noted that it might be necessary to have another council meeting this month, and said will keep the council apprised of the situation.
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By Naomi Hatch