With the United States Bankruptcy Court approving a settlement between Halifax County and Klausner Lumber II last month, county Attorney Glynn Rollins expects the remainder of the proceedings in the matter to move swiftly.
“We are moving full speed ahead,” the attorney told county commissioners at their meeting Monday morning. “We reached a settlement agreement. A lot of things are going to be happening quickly to sell this property.”
With the settlement in mind, Rollins brought before the board a resolution to ratify and confirm all prior actions of the board and county staff related to the matter with Klausner, which was to build what was described as a state-of-the-art sawmill in the Enfield area.
Under terms of the revised settlement there remains an $11 million strike price but instead of the county receiving $4.5 million, it would receive $4.6 million. The first $1.5 million would be paid to the debtor.
Commissioner Patrick Qualls, who put the motion to approve the resolution on the table Monday said later that afternoon, “People don’t realize that this is money that the county would have never received had Klausner fulfilled the terms of their economic development agreement. With the property tax already paid plus the $4.6 million we’re virtually at a break-even. From my understanding we have two capable companies that are ready to get the sawmill running, provide substantial jobs, and as important as the jobs, provide an avenue for taxpayers and landowners to have competition for the wood which brings more money into the county. In addition, all of the businesses that work with the timber industry such as fuel companies, tire companies, and logging companies will reap a benefit from the ongoing operation of a good company.”
Qualls said the county has a substantial tax base on the ground at the facility and the county attorney negotiated that the taxes would be paid for this year, a figure he said that’s over $1million.
The resolution passed unanimously.
Rollins said two companies are interested in the sawmill and there will be an auction upcoming via ZOOM.
While he wasn’t in a position to name the companies, the names and information will be revealed later in court documents related to the case. The bankruptcy court judge will oversee this phase of the settlement as well.
Commissioners have been meeting in closed session on a regular basis since April to discuss the litigation against Klausner Lumber II, Rollins noted in documents contained in the agenda packet for the meeting. “Over the next several weeks, the Klausner property — including the real property now owned by the county as a result of a reverter of title — will be sold under the supervision of the bankruptcy court.”
Board Chair Vernon Bryant praised the work Rollins did on reaching the settlement. “This guy has done a tremendous job.”
Said Qualls: “That’s a very good job.”
Klausner was announced by former Governor Beverly Perdue in 2012 as an economic development project which would bring 350 jobs to Halifax County and represented what was to be a $130 million investment.
The motion by Klausner seeking approval of the settlement said the company was to be one of the first new sawmills built in the United States for some time.
It was to use European technology “that would result in efficiencies of operations and production, and far greater utilization and less waste of raw materials,” and if successful would have brought a competitive advantage over domestic lumber mills.
Construction of the sawmill began in 2014.
Several setbacks and delays occurred during construction over the next several years, and the debtor’s sawmill never became fully operational, which caused a drain on liquidity, previous documents reviewed in the case show.