Chapter 11 bankruptcy is a type of bankruptcy filed by businesses that need to restructure excessive debt and reorganize their assets. The process generally culminates in a court-approved restructuring, as was the case recently in Wisconsin. NewPage Corporation, the largest maker of glossy coated paper in the United States, recently received court approval for its restructuring plan, which will enable it to exit Chapter 11 bankruptcy.
NewPage Corp. filed for bankruptcy protection in September 2011, citing debts of $3 billion. The case is Wisconsin’s longest-running restructuring case in the paper industry. NewPage runs three mills in Wisconsin and has about 1,700 employees in the state. The Wisconsin mills were once owned by Consolidated Papers Inc., the company that invented machinery that makes gloss-coated paper. There is no word on if the plants will stay open in the newly streamlined company’s future.
As part of the restructuring process, NewPage has appointed a new board of directors and secured hundreds of millions of dollars of credits and new loans. The new chairman of the board of directors formerly worked for the largest printer in North America. He also worked at a Canadian printing company and once held the office of deputy mayor in Chicago, where he helped the mayor get the city out of a serious fiscal hole.
Business reorganization can often help a corporation get back on track financially. Companies with financial difficulties should seek information about debt relief options, including Chapter 11 bankruptcy.
Source: Journal Sentinel, “Papermaker emerges from Chapter 11 bankruptcy,” John Schmid, Dec. 24, 2012