Milwaukee readers may have heard the news that the owner of Virginia-based paper company Verso Corp. recently filed for bankruptcy, listing $2.4 billion in debt. The company owns two mills in Wisconsin, one in Stevens Point and the other in Wisconsin Rapids, having acquired them from NewPage about a year ago.
Mayors in both Stevens Point and Wisconsin Rapids have said that the closing will have no impact on operations at the plants. Still, the bankruptcy filing does highlight the challenges faced by the paper industry, which include the push to go paperless and the import of cheaper foreign products. Verso CEO, David Paterson, has said that the demand for paper products, particularly American-made products, has declined since Verso acquired the Wisconsin plants.
Verso is not alone in its struggles. According to court records, 27 other companies associated with Verso have filed for Chapter 11 bankruptcy in Delaware, Verso’s state of incorporation. Chapter 11 bankruptcy, like Chapter 13 bankruptcy, is a form of reorganization bankruptcy, meaning that it provides debtors the opportunity to reorganize their debts and come up with a repayment plan to pay off creditors.
Chapter 11 bankruptcy can be filed by either businesses or individuals. In individual filings, there are some similarities to a Chapter 13 filing, but there are some unique aspects of the process. More often, it is corporations and partnerships which file for Chapter 11 bankruptcy. In our next post, we’ll speak a bit more about some of the basic of Chapter 11 bankruptcy.
Source: United States Courts, “Chapter 11-Bankruptcy Basics,” Accessed Feb. 1, 2016.