This blog has recently discussed, in particular, how business bankruptcy options may help struggling business and professionals in Tennessee. The recent approval of the bankruptcy reorganization plan for a struggling papermaking company headquartered in Tennessee is a good example of how the bankruptcy reorganization process can be helpful for a struggling company. The company is the largest coated paper producer in North America.
The company, which filed for Chapter 11 bankruptcy protection earlier in the year, now must only follow its approved reorganization plan and its debts that existed prior to the bankruptcy will be discharged. The company, with approximately 500 employees, reported $2.4 billion in debt in the bankruptcy. It had reported similar revenues in the year prior to the bankruptcy. According to the plan, creditors will receive shares of stock instead of cash repayment. The company listed 30,785 creditors in its filing.
The company plans to emerge from bankruptcy before the end of the summer and a representative for the company noted that the company is happy with the process and the outcome. It had been struggling for some time and following the sale of one paper mill, continued to struggle. Along with the reorganization bankruptcy, the company plans to raise money and establish financial flexibility and a stronger credit profile. The company also has additional plans, based on the nature of the industry it is in, to become profitable once again.
Business bankruptcy options are designed to help struggling businesses through difficult financial times and enjoy profitability once again. It is important for businesses to be familiar with how bankruptcy resources can work for them and the options available to them.
Source: Portland Press Herald, “Judge confirms Verso’s bankruptcy reorganization plan,” J. Craig Anderson, June 23, 2016