St Paper Duluth

DULUTH — ST Paper, which restarted a shuttered local mill earlier this year , continues its battle to recoup funds from a check it says was altered and cashed by an unfamiliar third party.

After unsuccessfully seeking to resolve its loss of $106,305.58 through Bremer Bank, the company is now turning to higher authorities, filing complaints with both the Office of the Controller of the Currency and the Federal Reserve.

Bill Broydrick, a spokesman for ST, said the company had written a check to a supplier, Solenis LLC, in May. But the same check cleared with a completely different name on the front, made out to a mysterious Georgia-based business.

Two weeks later, Solenis notified ST Paper that it had not yet received payment.

ST informed Solenis that the check already had been cashed, but upon closer review, it discovered the name change.

In turn, ST Paper notified Bremer of the alleged check fraud and filed a report to the Duluth Police Department, but efforts to pursue the suspected perpetrator have so far proven unsuccessful.

While ST Paper had assumed Bremer Bank would have its back, Broydrick said the company soon found that not to be the case.

“We are totally dissatisfied with Bremer. We’re going to fire Bremer. And we want people to know how they handled this situation,” he said.

In the meantime, JP Morgan, the financial institution that cashed the check, has partially reimbursed ST Paper for its loss.

But Broydrick said the company has not been made whole.

“All that JP Morgan has done is they sent Bremer $70,000. And of course, the check was for more than $106,000. And that’s all Bremer has given back to us.”

When the News Tribune inquired about the situation, Claris Tushie-Lessard, senior vice president of communications for Bremer Bank, responded: “Due to legal obligations under state and federal regulations, Bremer Bank does not publicly comment on specific customer relationships.”

However, she went on to say, “Bremer Bank is committed to serving our customers and communities responsibly. We value the trust that our customers place in us, and we work hard every day to earn that trust.”

Broydrick expressed frustration, saying: “It’s not so much the money. It’s the principle of the thing. So, we send a check. It gets altered. JP Morgan cashes it. And nobody on the banking side of things will do anything about it.”

He also said ST expected better from Bremer.

“Rather than welcome us to the community, they played around with us about lending us money, and then they didn’t do anything. And now, they stiffed us. So, we’re not going to do business with them anymore.”

As for the decision to go public with the dispute, Broydrick said, “I think the public has a right to know how they treated somebody who created a lot of jobs and got a paper mill that was essentially shut down back into business. And it is in business and doing quite well.”

ST Paper has invested more than $25 million in the previously inactive Duluth paper mill, which was formerly owned and operated by Verso Corp., converting it to produce commercial bath tissue, paper towels and napkins. The company already employs about 70 people in Duluth and has pledged to boost its local workforce to at least 80 within three years.