Paper producer Verso Corporation and its subsidiaries have filed voluntary petitions with the Bankruptcy Court in the District of Delaware to reorganize under Chapter 11.
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Verso's board of directors authorized the filing of the Chapter 11 cases to facilitate a debt restructuring necessary to strengthen the company's balance sheet and to position Verso for long-term success.
Verso expects this announcement will have virtually no impact on the day-to-day operations of the company.
"While filing for Chapter 11 protection was a difficult decision, we are pleased that we enter this process with strong creditor support. We have worked together with a broad spectrum of financial creditors to develop a restructuring plan to eliminate $2.4 billion of our outstanding debt and to exit the Chapter 11 process in a short timeframe," said Verso President and CEO David J. Paterson.
The expected agreement on terms for a plan of reorganization is with creditors holding at least a majority in principal amount of most classes of funded debt of Verso and its subsidiaries.
Verso anticipates that upon finalizing agreed-upon terms, the plan of reorganization would result in the holders of its funded debt receiving equity of Verso in exchange for their claims.
Verso also expects to finalize a debtor-in-possession (DIP) financing package totaling up to $600 million in the next day that will provide the company with significant operational flexibility to successfully reorganize.
The DIP package will provide Verso with sufficient liquidity to support its ongoing operations for the foreseeable future during the Chapter 11 process.
Verso will promptly seek immediate relief from the Bankruptcy Court through the filing of customary first day motions that will allow the company 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. ■
A low pressure wave forming along a cold front will track across the New England coast this morning, bringing a period of rain, heavy at times for much of New England, especially for Maine today.