Embattled Verso Corporation Declares Bankruptcy
Verso Corporation, owner of the Jay Mill has filled for Chapter 11 bankruptcy protection.
Company officials announced the filing this morning in a Delaware bankruptcy court. A statement on the company's website says the company's board of directors authorized the filing 'to facilitate a debt restructuring necessary to strengthen the company's balance sheet and to position Verso for long-term success.' It goes on to say that the move 'will have virtually no impact on the day-to-day operations of the company.'
Verso plans to seek immediate relief from the Bankruptcy Court that will allow it to 'transition its business into Chapter 11 including, among other things, granting the authority to pay pre-petition wages, salaries, and benefits and to honor customer programs.'
Verso President and CEO David Paterson says external factors have propelled the company to take this step, since buying NewPage Holdings Inc. a year ago. Those factors include an unprecedented decline in demand for their products, a significant increase in foreign imports resulting from a strong U.S. dollar relative to foreign currencies, and Verso's impending financial obligations.
"Verso chose to take this proactive step," Paterson said in the release, "with the firm belief that our company will emerge from the Chapter 11 process as a stronger company that is positioned to compete and win, even as challenges in the overall economic environment continue."
Company officials say they don't expect the move to have any impact on day to day operations. In December, Verso laid off 300 workers at the mill in Jay. 500 people still work there. And earlier this month, the company sold four hydroelectric generation facilities from the mill, in what they term an effort to raise money.