Bankruptcy Court Issues $2.3 Million Check to Montville

As part of the final bankruptcy case, the town receives $2,360,000, of the $2.5 million sale of AES Thames.


A federal bankruptcy court approved the payment, a check was cut and within an hour of receipt, Montville Mayor Ronald McDaniel “walked it straight down to the bank;” a check for $2,360,000 to cover taxes owed to the town by the now bankrupt AES Thames.

“It was a great Christmas present,” McDaniel said.

McDaniel said he and Town Finance Director Terry Hart and Town Assessor Lucy Beit worked tirelessly and almost daily to ensure that Montville be the priority creditor in the bankruptcy.

“We had to fight very hard. Terry and Lucy and I were on conference calls daily with the court reasserting our position,” McDaniel said. He explained that once the court had awarded expenses to the trustee “the town got all that was left.”

“Once the deal was closed with Interstate Construction Services for $2.5 million, our contention all along was that we were the priority (creditor) and the lien superseded everyone else (AES Thames owed),” he said.

The original plan was to help bring in an interest to take over the site.

“I was doing a lot of fishing but never hooked anyone,” McDaniel said. “Bottom line, if you can’t sell the power, what good is a plant?”  

AES Thames, a coal-burning power plant, filed for bankruptcy in February of 2011. 

Fake Mr. Fuji January 03, 2013 at 01:43 AM
Everyone in town gets a lunch special and Tums.
Sam Rogers January 03, 2013 at 05:04 AM
It's simply not true that "town taxes are always a top priority in any bankruptcy case." Whereas in a bank foreclosure any town taxes owed will always have priority over a first mortgage and any junior incumbrances, in bankruptcy, taxes are something like seventh or eighth in order of priority after the secured creditors (although all categories may not be present in every case). Moreover, timely presentation of claims is essential in bankruptcy court, which is no easy task when it comes to unpaid real estate taxes on which interest is constantly accumulating at 18% per year per state law, and personal property taxes on equipment that may be on a depreciation schedule, or which may have been removed at some point in time after the arrearage began.
Paul Cote January 03, 2013 at 01:29 PM
I want to thank the Patch for breaking this story in a headline yesterday and for today's write up. I expected to get more details from The Day newspaper today, but alas, no story. Montville is so often overlooked by our neighbors to the south. I checked out the Norwich Bulletin and there it was. This is great new for the town of Montville and starts us off on the right foot.
Howard January 03, 2013 at 05:05 PM
Jerry: I stand accused of being bitter about Montville town government. In a way, I suppose I am but maybe upset would be a better descriptor. The town takes the most of five of my Social Security checks in taxes. In return, I get crumbling infrastructure (i.e. Montville Road bridge, Fair Oaks School) and essentially no police protection (three routine patrols in one year). The fire departments are great but then the council does not have much to do with their day-to-day operations. I also get lawsuits to raise my taxes even higher. For example and in no particular order; McNally vs. WPCA, the Rand-Whitney Containerboard lawsuit (cost the town $11.7 million), Vaill vs. Montville, Weiss vs. Montville, Lenda vs. Montville, Property Owners of Podurgiel Lane vs. Montville (planning), Property Owners of Podurgiel Lane vs. Montville (mudslide), FOIA complaints, ACLU vs. Montville (potential – almost certain - Senior Safety Zones) On top of all that, I get the Water Control Pollution Authority corruption and political infighting not to mention the same in the police department and town hall. The town provides some good services but those are not directly affected by, or affiliated with, the town council (Senior Center and Youth Services). Call me bitter if you want, I have grounds for whatever my attitude is labeled.
jane February 06, 2013 at 12:41 PM
I agree it was nice to get some of the taxes due, but the fact is if we don't get that property marketed soon the 2M may be the only tax money we see on that property for a long time.


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