Staff Writer

Corcoran Environmental Services in Kennebunk has declared bankruptcy citing the collapse in prices of recyclable material causing its financial struggle. 

The company announced plans to file for Chapter 11 on April 6 and notified  clients a day later. Company Vice President Nadja Corcoran said by filing for Chapter 11 through district court, it allows the company to reorganize the business, create a plan to pay back debt and continue providing services to customers. 

According to documents with the United States Bankruptcy Court District of Maine, Corcoran Environmental Services owes nearly $1.5 million to 20 of its largest creditors, ranging between $230,726 to Covanta Haverill of Massachusetts to a little more than $17,000 to Coca-Cola Bottle Company of New England in New Hampshire.  It owes lesser amounts to another 111 creditors in Maine and New Hampshire, one of which is the town of Kennebunk. 

Other companies dealing in recyclable material have been affected as well. Corcoran Environmental Services owes fourth largest creditor ecomaine about $113,000. Ecomaine is a non-profit waste management company based in Portland owned by 21 municipalities. 

In a market index provided by ecomaine, the price for newspaper went from $162 per ton in August to between $0 and $48 per ton in November. Currently, the price is $40 per ton, which, according to ecomaine General Manager Kevin Roche reflects the “dramatic deterioration” of recycling markets.

Corcoran Environmental Services work with municipalities includes collecting recyclables in a two-sort system. In Kennebunk, the company collects cardboard and paper one week and commingled containers including plastic, returnable bottles and cans, glass and steel, tin and aluminum cans the alternate week. The company also runs the town’s transfer station located on Sea Road. Corcoran said there will not be any changes to service due to the bankruptcy filing. 

“We’re still in business,” Corcoran said. “We felt this was the most responsible thing we could to in terms of protecting everyone associated with us.”

Serving various municipalities in southern Maine, Corcoran Environmental Services also was also working with Biddeford’s recycling committee last fall to develop a similar recycling system as Kennebunk’s. Biddeford City Manager John Bubier said the city decided nearly two months ago not to move forward with the contract after being unable to reach a mutual agreement. 

Corcoran Environmental Services has conducted business in Kennebunk for nearly 12 years and operating a secondary site in Manchester, N.H. As a commodity brokerage and recycling consultant, Corcoran Environmental Services has been affected by the economy due to less demand for recycled materials, Corcoran said.

Corcoran said her company is basically the “middle man” when it comes to recycling – picking up materials from businesses or municipalities in southern Maine and New Hampshire and selling it to companies that use the commodities to create products. 

“In the fourth quarter (October, November and December), the economy crashed and everything goes down with it. It’s a cascading effect. When spending is down, the whole climate changes and we’re not producing the volume we’re used to. The prices for recycling material we get paid for is significantly lower or we had to pay to get rid of some of it. Trying to run a business off that doesn’t work.”

The company deals with paper, cardboard, various plastics and glass, and Corcoran said in the past the company’s diversity has helped, but the price on everything dropped at the same time.

With a slight increase since December, she said the company hopes the economy has reached its turning point. 

Roche said it is difficult to predict the future of commodities, but said it is based on supply and demand. With businesses struggling and producing less, he said they do not need as much packaging and with no boxes to be made, there is no demand for recycled fiber. 

“It’s a ripple effect through the scrap economy,” Roche said. “If demand increases less there is less supply because we are dealing with less produce, and so a shift could happen quickly.”

Corcoran Environmental Services petition for Chapter 11 was approved and they have various court dates scheduled throughout  April. Corcoran said the company is working with its lawyer and a financial strategist to create a reorganization plan.

Corcoran Environmental Services is maintaining a majority of staff, laying off only a couple employees recently, Corcoran said. With 15 employees working on regular accounts and reorganizing the company, it is “business as usual,” she said. 

“It is hard to be going through this, but it is reality. This is just one of our downs and after it’s over we’ll be better for it. This business is extremely important and we’ll do anything to keep it alive.”

Staff writer Emma Bouthillette may be contacted at 282-4337 ext. 237.