Verso Corp Considers Bankruptcy Following Wickliffe Mill Idling

Nov 17, 2015

Credit Verso Corporation / Facebook

The Verso Corporation is considering bankruptcy proceedings after idling its paper mill in Ballard County and laying off more than 300 employees in August.  

Verso released its third quarter financial report yesterday.  

The Q3 shows seasonal paper sales up this quarter, but overall sales, volume and prices down from the same time last year.  

But the report does note a $293 million net loss for the first nine months of 2015, which Verso President David Paterson attributes to oversupply and increased demand for foreign paper.  The company is now considering a financial restructuring which may include Chapter 11 bankruptcy or a out-of-court settlement.

"Despite continuing soft market conditions, Verso saw seasonal volume increases in the third quarter, particularly in coated freesheet," said Paterson, in a release.  "In response to a continuing decline in demand and oversupply of products, we decided to downsize our Androscoggin mill and indefinitely idle our Wickliffe mill, which together will reduce Verso's production capacity by 430,000 tons of coated paper and 130,000 tons of dried market pulp.  We also took 79,000 tons of market-related downtime across our mill system during the third quarter.

"Despite these important achievements, we intend to pursue a restructuring of our balance sheet to address our continuing cash flow and liquidity concerns."

Such a move could see Verso selling assets like the Wickliffe facility. The company owns seven other paper mills in the U.S.

The company "indefinitely idled" the mill in August, only seven months after acquiring it in January. Upon acquisition, Paterson warned the company could examine "cost synergies" over the year.

 Logging experts claim that delivered a $600 million hit to the Kentucky economy.  

The last of the Wickliffe mill employees were laid off Sunday.