Foothill refuses AIDEA's offer

Posted: Thursday, July 18, 2002

KETCHIKAN (AP) -- An auction to sell assets of a veneer plant was still on schedule Monday despite efforts by the Alaska Industrial Development and Export Authority's to buy the business.

Foothill Capital Corp. turned down an offer by AIDEA to purchase equipment used by the now defunct Gateway Forest Products, said AIDEA director Bob Poe.

But the state authority will continue efforts to stop the auction that is scheduled for Tuesday. The Ketchikan Gateway Borough Assembly was also seeking to intervene in the sale.

''We are still very engaged in this thing and are all very hopeful,'' Poe said.

Gateway Forest Products filed for Chapter 11 bankruptcy protection from its creditors in February 2001, but the case was later dismissed.

Foothill, a subsidiary of Wells Fargo banking company, is trying to recoup about $14 million in debt owed to it, according to the Ketchikan Daily News.

AIDEA has been in talks with a veneer company in Oregon and the Sealaska Corp., which logs timber in Southeast Alaska, to stop the auction.

AIDEA is considering purchasing Gateway's assets and leasing them to Timber Products Co., of Medford Ore., and Sealaska.

Timber Products would operate the plant and sell the veneer products and Sealaska would provide the timber.

The state authority is trying to piece together a deal to buy the veneer mill at a cost of less than $5 million, Poe said. The auction is expected to bring in between $2.5 million and $3 million, Poe said.

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