On September 7, 2011, NewPage Corporation (“NewPage” or “Debtors”) filed petitions for bankruptcy in the United States Bankruptcy Court for the District of Delaware.  As stated in NewPage’s Declaration in Support of First Day Motions (the “Declaration” or “Decl.”), filed with the Bankruptcy Court, NewPage produces coated paper used in magazines, brochures catalogs and textbooks.  NewPage manufactures its products in paper mills located in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and in Nova Scotia, Canada.  Decl. at *4.

NewPage sells the majority of products in the United States and Canada.  The company uses three primary sales channels – direct sales to customers, sales to brokers who re-sell the products to end users and specialty sales to packaging and label manufacturers.  Decl. at *7.  Going in to bankruptcy, NewPage’s workforce consists of approximately 6,000 employees, 70% of whom are represented by labor unions.  The Debtors have 16 collective bargaining agreements with its unions, most of which are settled and ratified.  One collective bargaining agreement remains open and subject to negotiation as of the Debtors’ petition date.

NewPage blames its bankruptcy on several factories, most significantly a decline in the demand for coated paper.  Demand for coated paper is dependent upon the demand for advertising and print media products.  The recession that began in 2008, and the financial uncertainty that continues through today, have reduced demand for advertising and print catalogs.  The continued growth of internet advertising has also negatively affected demand for NewPage’s products.  Decl. at *14.

Aside from a drop in demand, NewPage attributes its bankruptcy filing to an increase in costs of raw materials.  Wood, fuel and chemicals are key ingredients in paper production.  All three of these materials have experienced significant price fluctuations.  Wood prices are affected by fluctuations in regional markets and fuel costs.  Many of the chemicals NewPage uses to manufacture paper are also petroleum-based and fluctuate with oil prices. Decl. at 15.

Going in to bankruptcy, NewPage has filled several “first day” motions with the Bankruptcy Court.  Through the first days motions, the company seeks court approval to continue using certain bank accounts, pay employee wages and make distributions to creditors the Debtors believe are “critical vendors.”   The NewPage bankruptcy proceeding is before the Honorable Kevin Gross.  NewPage is represented by the law firm Pachulski Stang Ziehl & Jones LLP.