Stacks of bailed straw at Columbia Pulp near Starbuck on the Snake River, March 24, 2022.

Stacks of bailed straw at Columbia Pulp near Starbuck on the Snake River, March 24, 2022.

The fate of Columbia Pulp LLC is still undecided, with a $758,490 debt hanging over its head and a court order to hand over assets to a property manager, but one asset needs liquidating right away, a court request says.

This month, Lance Miller of Paladin Management Group LLC — the court-appointed receiver in charge of the Starbuck mill now — is requesting that a judge allow him to sell $550,000 in straw and alfalfa bales to nearby Columbia Straw Supply LLC.

“Time is of the essence to sell the straw,” according to the statement of fact filed by UMB Bank, the bond holder, with King County Superior Court. “Much of the straw is uncovered, and the quality will deteriorate as the weather turns warmer, and therefore reduce its value.”

The purchase would include straw bales already in possession of the straw supply company, bales at Columbia Pulp, a truck scale and all books and records relating to these items.

According to the court papers, this sale would resolve a dispute between the straw company and Columbia Pulp “regarding performance under the straw supply contract” and avoids costly litigation. And since Columbia Pulp is no longer operating as a mill, it has no need of the straw.

The hearing is scheduled for Wednesday, July 6.

King County Superior Court became involved in the operations at Columbia Pulp, an alternative pulp mill in Columbia County using straw rather than wood to create pulp for paper products, in March of this year when UMB Bank, in its capacity as trustee for bonds issued to Columbia Pulp by the Washington Economic Development Finance Authority, filed a complaint regarding the mill’s failure to make payments when due.

The 140,000-square-foot mill at Lyons Ferry didn’t begin operating until September 2019, after many years of seeking a site, funding and permits. It was functioning barely six months before being forced to close due to pandemic restrictions. The plant reopened in June 2021.

Then in February of this year, the company announced that a majority of operations at Columbia Pulp LLC would be shutting down “for an undetermined length of time” while the young company worked on “developing a market for its unique product.”

Approximately 80 employees lost their jobs, with a small staff continuing to handle daily business operations, according to information provided to the Union-Bulletin at the time. But the company’s interim CEO, Terry Ryan, said this did not mean the pulp mill was going out of business.

One month later, an announcement by the Columbia County Sheriff’s Office stated that Columbia Pulp LLC had until April 15 to pay off a debt of $758,490.97 plus fees or its property would be sold to satisfy the judgment.

Just before April 15 arrived, Columbia Pulp was ordered by a King County judge to hand over its assets to a property management group.

Paladin Management Group, through Miller, was to take over the assets of the company and oversee daily operations of the plant. It also had control over the buildings and structures of the mill, the 40 acres it is located on, as well as the 409 acres of undeveloped land adjacent to the plant.

Miller, the general receiver, was ordered by the court to draft a plan for liquidation of the property.

The pulp company is still liable for its financial obligations, according to court documents, but the collection of its debt is stalled while in receivership.

Max Erikson can be reached at merikson@wwub.com.

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