Verso Paper says Chapter 11 bankruptcy filing not ruled out

SEATTLE (Scrap Monster): Verso Paper has announced the possibility of entering Chapter 11 bankruptcy proceedings, on account of lack of financial resources. The company is planning to initiate restructuring operations through a court-supervised Chapter 11 bankruptcy proceeding. As part of restructuring, Verso is also considering sale of some of its mills. It has hired PJT Partners LP and O'Melveny & Myers LLP as restructuring advisers.

According to the company, a restructuring of balance sheet is inevitable to meet significant cash obligations in the near future. The financial resources of the company will not be sufficient to fund these obligations. The company is currently evaluating various options for restructuring its debts. It could be either through out-of-court manner or through a court-supervised bankruptcy filing.

The company spokesperson stated that the company might sell the mills in Duluth, Minnesota and Stevens Point, Wisconsin. The company noted that these operations are accumulating losses, as demand for coated paper products from the mills have dropped significantly due to weak market demand situation and increased imports of these products from other countries. The company also considers selling of Androscoggin Mill and the hydroelectricity generation facilities associated with it . It must be noted that Verso has already decided to cut the Jay, Maine workforce by 300 next month. In addition, it has already idled the mill in Wickliffe, Kentucky.

Based in Memphis, TN, Verso Corporation is a leading North American producer of coated papers including coated groundwood, coated freesheet, supercalendered and specialty products. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs, and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising.