Verso Paper Corp., which used to own and operate the paper mill in Bucksport, has announced its filing for bankruptcy protection. PHOTO COURTESY OF 4 ROTOR FILMING

Verso Paper Corp. files for bankruptcy

BUCKSPORT — Verso Paper Corp., the company that ran the local paper mill until selling it to a metal recycling firm last year, has filed for bankruptcy, the company announced Tuesday.

Verso still owns and operates another paper mill in Maine, though it has announced layoffs at that mill as well. The Bucksport closure in December of 2014 resulted in more than 500 employees losing their jobs and the town losing almost half its property tax valuation.

Applying for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court will allow the company to restructure and eliminate $2.4 billion in debt, President and CEO David Paterson said in a press release Tuesday.

“While filing for Chapter 11 protection was a difficult decision, we are pleased that we enter this process with strong creditor support,” Paterson said. “We have worked together with a broad spectrum of financial creditors to develop a restructuring plan.”

The bankruptcy filing will not affect the company’s day-to-day operation, according to the announcement.

When the company announced it would close the Bucksport mill, it attributed the move to shrinking demand for the coated magazine paper produced here, competition from abroad and volatile electricity prices.

The new owner of the mill, a subsidiary of Montreal-based American Iron and Metal, began demolishing it in December of 2015. The process is expected to take a year and a half.

It plans to redevelop the site and is still operating, as a separate business, a power plant located on the mill property. That separate business has also filed for bankruptcy protection, though for reasons unrelated to the declining U.S. paper industry.

Charles Eichacker

Charles Eichacker

Reporter at The Ellsworth American
Charles Eichacker covers the towns of Bucksport, Orland, Castine, Verona Island, Penobscot, Brooksville and Dedham. When not working on stories, he likes books, beer and the outdoors. [email protected]

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