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Tennessee paper company considers bankruptcy

A paper company that is based out of Memphis is facing significant financial challenges. Verso Corp. recently reported that it has lost nearly $300 million just this year and close to $900 million in the last three years. Its recent acquisition of other companies' assets has not stimulated its growth and the entity is also suffering significant losses due to increases in imported paper goods.

At this time Verso Corp. is looking into its options to keep its operations going. It may pursue a restructuring of its assets and liabilities outside of the bankruptcy process, or it may file for Chapter 11 bankruptcy in order to acquire the process's protections. As it moves forward, though, the company will have to make significant changes if it hopes to become solvent. It was recently dropped from the New York Stock Exchange due to the low value of its stock.

Financial hardships can befall businesses just as they can subject individuals to significant economic stress. A business's failure to keep up with industry practices can render it obsolete and can cripple its ability to sustain itself. Chapter 11 bankruptcy, however, can offer an entity a way to reconfigure its business, all while keeping its doors open.

The purpose of Chapter 11 bankruptcy is for a business to have a chance to become profitable in the future. For that reason the business may keep its doors open during the bankruptcy process so that it may grow into a stronger, more solvent entity. Though it is unclear at this time if Verso Corp. will choose to undertake the Chapter 11 bankruptcy process, it may benefit from the restructuring of the procedure as it overcomes its significant debts.

Source: The Commercial Appeal, "Verso considers bankruptcy restructuring as losses mount," Sara K. Clarke, Nov. 16, 2015

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