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UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
EMEP, LLC,
Plaintiff,
v.
NORTH AMERICAN RECOVERY
MANAGEMENT, LLC,
Defendant.

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CIVIL ACTION
Docket No. __________________

DECLARATION OF WILLIAM J. HARRINGTON IN SUPPORT OF
PLAINTIFF EMEP’S MOTION FOR TEMPORARY RESTRINING ORDER
AND PRELIMINARY INJUNCTION
I, WILLIAM J. HARRINGTON, hereby declare under penalty of perjury, pursuant to
28 U.S.C § 1746, that the following is true and correct to the best of my knowledge and belief:
1.

My name is William J. Harrington. I am over the age of 18 years old and

competent to testify to the matters contained herein based on my personal knowledge of the
events underlying this lawsuit. I submit this Declaration in support of Plaintiff EMEP, LLC’s
Motion for a Temporary Restraining Order and for Preliminary Injunction, filed in connection
with the above captioned matter.
2.

I am a member of EMEP’s parent company, Capergy US; a Principal and

authorized representative of EMEP; and Director of Stored Solar, LLC (“Stored Solar”), which,
together with the Maine Department of Economic and Community Development, partnered with
EMEP in connection with a $240,000,000 initiative to acquire, upgrade and operate biomass
power plants throughout the State of Maine, including facilities in West Enfield and Jonesboro
(the “Biomass Plants”), that would use biomass as a fuel and feedstock to generate a synthetic
biofuel.

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3.

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The centerpiece of EMEP’s plan for the Biomass Plants is the construction and

operation of an energy park, which would include a biomass power plant and a biorefinery (the
“Biorefinery”) on the site of the former Great Northern Paper Company Mill (the “GNP Mill”) in
East Millinocket, Maine.
4.

Based on feasibility studies my partners and I have commissioned, the Biorefinery

is expected to generate 92,000 gallons of biofuel liquids (biodiesel and gasoline) a day, or
approximately 33,000,000 million gallons per year. Without the Biorefinery or other additional
revenue streams, the Biomass Plants will not be able to produce sufficient revenues and net
profits so as to make the Maine Biomass project economically feasible. Further background and
an overview of our plans for the site of the former GNP Mill are contained in an Executive
Summary excerpted from Stored Solar’s application for a Department of Energy loan to finance
the Biorefinery and attached hereto as Exhibit A.
5.

Through my conversations with officials from the Town of East Millinocket, I

understand that the closure of the GNP Mill had a significant detrimental impact on the local
economy. Based on current market rates, the Biorefinery and the Biomass Plants will generate
revenue of tens of millions of dollars and create hundreds of jobs once they commence
production (which, prior to the instant dispute, EMEP originally anticipated would begin in
September of 2019). Once operational, the Biorefinery itself would create 102 full time jobs,
and during the 24-month construction process, we anticipate that 1,020 direct construction jobs,
866 indirect construction services jobs, and 652 induced jobs will be created in Penobscot
County alone.
6.

Based on the knowledge I gained through my research of the site of the former

GNP Mill, I know the Mill closed its operations in February of 2013. I also know that in March

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of 2016, a Delaware subsidiary of Defendant North American Recovery Management, LLC
(“NARM”) – a company specializing in demolition and salvage of obsolete assets – purchased
the buildings and equipment located at the GNP Mill site. In May of 2016, myself and my
partner, Fahim Samaha, a principal of Stored Solar and the President of Capergy US LLC (the
majority owner of EMEP), contacted NARM to express interest in purchasing the former GNP
Mill’s assets in order to construct the Biorefinery.
7.

On June 30, 2016, EMEP and NARM entered into a binding Letter of Intent (the

“Letter Agreement”) whereby EMEP agreed to purchase a power plant, several mill and office
buildings, and equipment (collectively, the “Property”) located at the GNP Mill site, along with
an option to purchase contiguous property owned and/or controlled by GNP’s Chapter 7
Bankruptcy Trustee (the “Bankruptcy Property”).

A true and correct copy of the Letter

Agreement I signed on behalf of EMEP is attached hereto as Exhibit B.
8.

Under the Letter Agreement, EMEP agreed to purchase the Property and the

option to purchase the Bankruptcy Property for $1,750,000.000. EMEP agreed to deliver to
NARM a deposit of $100,000.00 (the “Deposit”) within ten (10) days of the execution of the
Letter Agreement. This Deposit was non-refundable except in the event that NARM breached
the Letter Agreement or EMEP gave NARM written notice of its intention to terminate the Letter
Agreement during the Due Diligence Period (as defined below) if the results of EMEP’s due
diligence were unacceptable or if EMEP was unable to agree to purchase the Bankruptcy
Property from the Bankruptcy Trustee for $100,000.00 or less.
9.

Under Section 5 of the Letter Agreement, EMEP was granted a period of sixty

(60) days from June 30, 2016 to complete its physical due diligence on the Property (the “Due
Diligence Period”), during which time NARM agreed to give EMEP reasonable access to the

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Property. Section 6 of the Letter Agreement then contemplated that EMEP and NARM would
negotiate and execute a Purchase and Sale Agreement (the “P & S Agreement”) prior to the
expiration of the Due Diligence Period.
10.

Section 4 of the Letter Agreement provides that the closing of the transaction

would occur within the later of (i) thirty (30) days from the completion of EMEP’s due diligence
on the Property; or (ii) NARM’s completion of its operations (NARM’s “Operations”) on the
property, specifically, the removal of all non-ferrous metals from the Property (namely,
equipment that had been used in connection with the GNP Mill’s past operations that was not
needed to operate the power plant or the Biorefinery). Section 4 of the Letter Agreement further
provides that the parties agreed that a “simultaneous closing on both the Property and the
Bankruptcy Property” must occur and the parties “acknowledge and agree that the acquisition of
the Bankruptcy Property by EMEP is a material condition of EMEP’s obligations under this
LOI.” In the event EMEP was unable to agree to purchase the Bankruptcy Property from the
Bankruptcy Trustee for $100,000.00 or less, EMEP could terminate the Letter Agreement.
11.

Except with respect to the non-ferrous metals contemplated by Section 1 of the

Letter Agreement, the parties agreed that NARM would not remove any other materials or
equipment from the Property without EMEP’s written approval.
12.

Section 9 of the Letter Agreement states that the “parties acknowledge and agree

that the terms and conditions of this LOI are binding and legally enforceable agreements of
NARM and EMEP.”
13.

On or about July 18, 2016, EMEP delivered the Deposit to NARM via wire

transfer. EMEP and NARM agreed that the Deposit would be delivered on July 18, 2016 after
the parties realized that the Letter Agreement did not specify whether the 10 day time period

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referenced therein referred to business days or calendar days.
14.

Shortly thereafter, in reliance on the Letter Agreement, EMEP and Stored Solar

began meeting with potential equity investors to share in 30% of the cost of the project. EMEP
and Stored Solar also began the process of obtaining a federal loan guarantee from the United
States Department of Energy’s (the “DOE”) Loan Program Office for the remaining 70% of the
expected cost of the project. EMEP incurred significant costs to begin its plan to acquire
additional Biomass Plants, including the performance of its due diligence as contemplated by the
Letter Agreement and completion of an expensive feasibility study for the entire project, with the
Biorefinery at the site of the former GNP Mill serving as the centerpiece of the project.
15.

Because the closing of the Property was contingent on the completion of NARM’s

Operations, which were delayed and continued throughout the fall and into November of 2016,
the closing of the Property was also delayed and, as a result, neither EMEP nor NARM drafted a
P & S Agreement within the period of time contemplated by the Letter Agreement.
16.

EMEP provided NARM with regular updates on the status of its negotiations with

the Bankruptcy Trustee, and NARM gave EMEP consistent updates on the status of its
Operations. NARM never once stated to EMEP that it considered the Letter Agreement to have
expired after the end of the Due Diligence period. To the contrary, NARM, through its CFO
Jason Inoff and COO Robert Katz, continually reassured myself and Mr. Samaha that EMEP and
NARM had an agreement to buy the Property and that the parties were progressing towards
closing the transaction in accordance with the terms of the Letter Agreement
17.

Mr. Samaha and myself continued to discuss the details of the transaction and

NARM’s Operations with Messrs. Katz and Inoff during multiple site visits, conference calls and
emails throughout September, October and November of 2016, as NARM’s Operations on the

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Property continued, and NARM’s words and actions consistently reassured EMEP that the
parties still intended to be bound by the Letter Agreement. During September, October and
November of 2016, neither Mr. Inoff nor Mr. Katz ever expressed or otherwise implied to EMEP
that they considered the Letter Agreement to have expired in August of 2016.
18.

Beginning in early October, 2016, Messrs. Katz and Inoff approached EMEP

about the possibility of expanding the scope of its Operations, which further delayed the
execution of the P & S Agreement. On October 5, 2016, I had a conference call with Messrs.
Katz and Inoff during which they requested permission to remove certain equipment held on the
Property that was not contemplated by the Letter Agreement. Understanding that the parties
were still proceeding towards the close of the transaction and that NARM was simply attempting
to complete its Operations, EMEP authorized NARM to remove this equipment. Thereafter,
there was some initial confusion concerning which building housed the equipment, and EMEP
requested assurances that only the equipment discussed on October 5, 2016 would be removed.
On or about October 14, 2016, this issue was resolved, and NARM began to remove the
equipment as part of its Operations. True and correct copies of correspondence documenting
portions of these conversations are attached hereto as Exhibits C and D.
19.

On November 4, 2016, myself, Mr. Samaha and Messrs. Inoff and Katz

participated in a conference call (the “November 4th Conference Call”), during which Messrs.
Inoff and Katz requested our authorization to demolish four additional buildings on the Property
(the “Additional Demolition”): paper machine Building 1-4; paper machine Building 5-6; a
building known as the “screen room”; and a building known as the “disc filter building.” Each
of these buildings was included in the Letter Agreement’s description of the Property EMEP
contracted to purchase. NARM further represented that the Additional Demolition would not

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include any other structures, including specifically an office building, machine shop, train shed,
and wet lap building, all of which EMEP intended to use in operating the Biorefinery.
20.

Myself and Mr. Samaha responded that we would give NARM authorization to

conduct the Additional Demolition only if (i) the Additional Demolition began after the closing
of the transaction; (ii) the Additional Demolition would be completed by May 1, 2017; (iii) the
Additional Demolition would not alter or interfere with any other assets identified in the Letter
Agreement; and (iv) the terms of the P & S Agreement would be revised to reflect the reduced
value of the Property as a result of the Additional Demolition. We further informed NARM that
EMEP was prepared to close the transaction by November 18, 2016, regardless of the Additional
Demolition, and if the parties reached agreement on the Additional Demolition, EMEP would
allow NARM access to the Property after EMEP took possession to complete the Additional
Demolition.
21.

At no point during the November 4th Conference Call did Messrs. Katz or Inoff

ever express or suggest that they considered the Letter Agreement to have expired in August of
2016, and their words and conduct – particularly their request for EMEP’s authorization to
conduct the Additional Demolition as required under the Letter Agreement – indicated to me that
the considered the Letter of Agreement to be binding.
22.

Immediately following the November 4th Conference Call, I sent Messrs. Katz

and Inoff a P & S Agreement consistent with the terms of the Letter Agreement, along with
notice that EMEP had recently received sufficient appraisals of the Bankruptcy Property to allow
it to propose a settlement offer to the Bankruptcy Trustee to purchase the Bankruptcy Property. I
further outlined my understanding of our phone conversation, which I asked NARM to confirm
as it was our “desire to get everything completed as we are prepared to close in accordance with

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the original LOI executed between the Parties.” A true and correct copy of my email, along with
the P & S Agreement I transmitted, is attached hereto as Exhibit E.
23.

On November 16, 2016, Mr. Katz informed me by email that his attorneys were

reviewing the P & S Agreement and would be back to us “shortly.” A true and correct copy of
Mr. Katz’s email is included on page 5 of the email chain attached hereto as Exhibit F. Relying
on our understanding that the Letter Agreement remained binding and that the Additional
Demolition would only reduce our overall cost of the transaction, myself and my partners
continued to expend resources on our plan to develop the Biorefinery and the Biomass Plants.
24.

On November 30, 2016, the DOE informed me that Part I of Stored Solar’s loan

application had been approved and that Part II of the loan application, the final step before
execution of the loan agreement, could be submitted. A true and correct copy of the letter from
the DOE is attached hereto as Exhibit G. However, because we cannot submit Part II of the
DOE loan application without proof of ownership of the GNP Mill site, we became increasingly
concerned that the DOE would withdraw its invitation to submit Part II of the loan Application
unless we closed on the Property in short order.
25.

On December 12, 2016 – following several site visits to the Property over the

previous 8 days – Mr. Samaha again requested via email that NARM comment on the P & S
Agreement and set a closing date before the end of the year. A true and correct copy of Mr.
Samaha’s email is included in Exhibit F on page 4. On December 14, 2016, Mr. Samaha
reiterated this request, reminding NARM that we needed an executed P & S Agreement before
the end of the year in order to start the process of connecting the Biorefinery to the New England
ISO power grid. A true and correct copy of Mr. Samaha’s email is included on page 3 of Exhibit
F. Mr. Katz replied that same day that NARM would respond “shortly.” A true and correct copy

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of Mr. Katz’s email is included on page 2 of Exhibit F.
26.

On December 21, 2016, Mr. Samaha again sought NARM’s response to the P & S

Agreement, reminding Messrs. Kartz and Inoff that we had invested significant funds and
resources completing our due diligence on the GNP Mill site and in preparing our plan for the
Biomass Plants. Mr. Samaha also informed NARM directly that the Biomass Plants were in
jeopardy if we did not close the transaction soon, and that NARM’s delay in conducting its
Operations had delayed the closing for almost four months. A true and correct copy of Mr.
Samaha’s email is included on page 1 of Exhibit F. From the outset of our negotiations in May
concerning the Property, we had made NARM aware of our intentions for the site and how
critical the Biorefinery was to the overall operation of the Biomass Plants.
27.

On or about January 8, 2017, an article appeared in the Bangor Daily News

stating that officials from East Millinocket were concerned that NARM had moved heavy
demolition equipment to the Property and was positioning itself to begin large scale demolition
operations. This article surprised and concerned me, given that NARM had yet to confirm our
understanding with respect to EMEP’s terms of the Additional Demolition, which we had not
given it authorization to conduct.
28.

Accordingly, on January 9, 2017, Mr. Samaha wrote Messrs. Katz and Inoff that

we were “very surprised to read in the news (please see below link) that you are planning to
substantially to [sic] demolish the buildings you sold us….” Mr. Samaha reminded Messrs. Katz
and Inoff that we had been “waiting for your feedback on the P&S agreement for over 2 months
now, and were hoping to progress on our agreed transaction.” A true and correct copy of Mr.
Samaha’s email is included on page 2 of the email chain attached hereto as Exhibit H.
29.

On January 9, 2017, the Bangor Daily News reported that NARM had filed a

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revised permit application seeking permission to demolish four buildings located on the
Property. Again, this happened without EMEP’s knowledge or permission
30.

On January 9, 2017, Mr. Katz finally reassured us that the only demolition it

would conduct on the site was the Additional Demolition discussed during our November 4th
Conference Call, and he blamed the state approval process for the delay, “which has dragged in
[sic] for two months,” in executing the P & S Agreement. Mr. Katz further promised us that
NARM would get back to us on the P & S Agreement later in the week, which led us to believe
that NARM was determining whether to sign the Agreement as originally drafted (thinking the
State would not approve the Additional Demolition), or a revised Agreement that would reflect a
reduced value of the Property caused by the Additional Demolition. A true and correct copy of
Mr. Katz’s email is included on page 2 of Exhibit H.
31.

In response to Mr. Katz’s email, Mr. Samaha again sought NARM’s confirmation

that the office building, machine shop, train shed, and wet lap building would not be interfered
with, and he asked NARM specifically to reply to my email of November 4, 2016 wherein I
asked NARM to confirm the parties’ understanding with respect to the terms of the Additional
Demolition. A true and correct copy of Mr. Samaha’s email is included on page 1 of Exhibit H.
NARM did not respond to this request.
32.

On February 1, 2017, the Maine Department of Environmental Protection granted

NARM a land use permit authorizing the Additional Demolition (the “Land Use Permit”). A
true and correct copy of the Land Use Permit is attached hereto as Exhibit I. Given that NARM
had already once received our permission to expand the scope of its Operations, as defined by
the Letter Agreement, and that NARM apparently was now proceeding with a second Additional
Demolition without our authorization, myself and my partners began to worry that NARM was

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planning to breach our Letter Agreement. I called around to State officials who had been
involved in the permitting process, and I learned for the first time that NARM had expressed the
view that the Letter Agreement was no longer binding and that it was exploring the possibility of
selling the property to another buyer. This came as a complete surprise to me, as NARM had
never expressed or implied that position to EMEP, but to the contrary, had consistently reassured
us that NARM intended to close the transaction as contemplated by the Letter Agreement.
33.

Accordingly, later that day (February 1, 2017), EMEP’s attorney sent Mr. Inoff

correspondence informing NARM that EMEP considered the Letter Agreement to be a valid and
enforceable contract that obligated NARM to sell EMEP the Property under the terms set forth in
the Letter Agreement. EMEP also made a formal request that NARM proceed with the closing
of the Property in accordance with the Terms of the Letter Agreement. A true and correct copy of
this correspondence is attached hereto as Exhibit J.
34.

On February 7, 2017, the Bangor Daily News reported that NARM had received

the necessary permits to begin the Additional Demolition, which had begun on February 6, 2017.
While the Bangor Daily News noted concern among East Millinocket officials that NARM’s
actions had placed the sale of the Property in jeopardy, the article quoted a statement issued by
Mr. Inoff to the effect that the Additional Demolition “will not affect any future development of
the site.” Because my partners and I understood Mr. Inoff’s statement to mean that the parties
agreement to purchase the Property was not in jeopardy, Mr. Samaha sent Messrs. Inoff and Katz
yet another request to finalize the P & S Agreement on February 8, 2017. That same day, Mr.
Inoff responded that it had “received a letter from an attorney regarding the site and out attorneys
will be responding in due time.” A true and correct copy of this email exchange is attached
hereto as Exhibit K.

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35.

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On February 10, 2017, NARM’s attorney sent EMEP a letter stating that NARM

“contends that the Letter of Intent . . . expired under its terms on or about August 13, 2016, and
that “while NARM is confident that the expired LOI no longer binds the parties, they remain
interested in exploring a potential sale of the Property. We will be listening to offers after March
1st.” A true and correct copy of this correspondence is attached hereto as Exhibit L. Apparently,
NARM now contends that the Letter Agreement expired less than 60 days after it was executed.
36.

EMEP has had no communication with NARM since February 10, 2017, and the

Additional Demolition on the Property is well underway despite the fact that NARM has not
executed the P & S Agreement or closed the transaction. At no point between the signing of the
Letter Agreement on June 30, 2017 and NARM’s February 10th letter did NARM inform my
partners and I that it took the position that the Letter Agreement had “expired,” and NARM has
never informed EMEP that it is in breach thereof. Instead, throughout our course of dealings,
NARM’s words and conduct led us to believe that reason the parties did not execute the P & S
Agreement during the Due Diligence Period was because NARM was delayed in completing its
original Operations and, later, in receiving state approval for the Additional Demolition.
37.

To date, in reliance on the Letter Agreement and NARM’s representations and

conduct during our negotiations, Stored Solar and EMEP have spent approximately $6 million
towards implementing its plan to purchase and construct the Biomass Plants and the Biorefinery,
which was and still is the centerpiece of our overall plan. EMEP is also working with the
Bankruptcy Trustee to purchase the Bankruptcy Property, and has provided the Trustee with the
appraisal EMEP secured at its expense, in reliance on the Letter Agreement.
38.

I am in close contact with officials from the Maine Department of Environmental

Protection, the Town of Millinocket, the Governor’s Office, and Maine’s congressional

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delegation, none of whom has reason to believe that NARM has an agreement to sell the
Property to any other buyer.
39.

EMEP has the support of the Governor’s Office, Maine’s Congressional

Delegation, and the Town of East Millinocket in its plan to construct the Biorefinery, and is in
the process of obtaining all federal and state approvals needed to begin construction of the
Biorefinery. Based on my experience in the energy industry, if EMEP does not receive proof of
ownership of the Property in the near future, I am very concerned that the DOE will withdraw its
invitation to file Part II of the loan application. Without DOE or similar financing, we cannot
build the Biorefinery which will put the entire Maine Biomass Plan in jeopardy.
40.

The Biorefinery is critical to the implementation of our overall plan to complete

the Maine Biomass plan, and without the Property, we will lose our financing and support and
will be forced to discard or greatly modify our entire plan of action. Put simply, without the
Property, our plan for the Biomass Plants in the State of Maine is in jeopardy.
41.

Based on my dealings with the company over the last eight months, I believe

NARM has demonstrated bad faith since the execution of the Letter Agreement and I am
concerned that NARM will soon ask the State for permission to go beyond the Additional
Demolition authorized by the Land Use Permit, thereby depriving the site of any resale value and
making it worthless for our purposes. NARM is in the business of demolition and salvage.
42.

NARM has not returned the Deposit to EMEP, and EMEP is fully prepared to

tender NARM the $1,750,000.00 purchase price of the Property (provided that the Additional
Demolition not contemplated by the Letter Agreement has not reduced the Property’s value), or a
reduced price based on the decreased market value caused by the Additional Demolition.

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Pusuantto 28 U.S.CS 1746,I declarethe foregoingis trueandcorect to thebestofmy
knowledgeandbelief.

DatedthisQfday

of February,1017.
WilliamJ. Hani

t4