April 07, 2020

Finova agrees to settle Corinna tax dispute> $67,000 to be paid for mill equipment taxes

CORINNA — After a year of negotiations and a court appearance, a dispute between the town of Corinna and the mortgage holder for the former Eastland Woolen Mill is coming to a close.

Finova Capital Corp. has accepted the town’s offer to take $67,000 to settle unpaid personal property taxes on the mill equipment. The only thing needed to complete the deal is selectmen’s signatures. That may be accomplished at a special meeting this week, according to Town Clerk Beth Englehardt.

The board is scheduled to meet tonight to continue work on the 1998 budget. If necessary, selectmen will act on the Finova settlement.

When Eastland closed in October 1996, the town was owed more than $320,000 in taxes on the equipment and real estate. Personal property taxes amounted to $90,000 for the 1996 tax year.

Almost immediately after foreclosing, Finova made arrangements to liquidate the mill’s equipment. The town attempted to stop the removal, citing the first lien rights to recoup the personal property taxes.

Before the year ended, Finova was directed to set aside $90,000 in an escrow account to cover the 1995-96 unpaid personal property taxes until a court could decide whether the company was responsible for the tax. The issue remained unresolved through 1997.

Finova initially claimed the town had not provided proper notice of the taxes due before the equipment was removed. The town produced receipts documenting the tax notices issued to everyone involved with the Eastland mortgage, including those signed by a Finova representative. Penobscot Superior Court Justice Margaret Kravchuk determined the company had adequate notice and should pay the tax. The company had 30 days to appeal the decision or negotiate a settlement.

The mortgage company’s initial offer to settle at $42,000 was refused by Corinna selectmen, according to Englehardt. Negotiations continued with counteroffers from the Board of Selectmen until the recent settlement.

When the tax dispute was reported last year, town officials said another $100,000 was owed on personal property taxes from 1992. Unpaid real estate taxes for 1992 and 1995-96 amounted to about $160,000 at the time.

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