COMBINED LOCKS, Wisconsin (From news reports) -- Appleton Coated, struggling under "burdensome debt," filed a state petition for receivership Thursday to continue operations while it seeks a buyer.
Filing a voluntary state Chapter 128 petition, an alternative to bankruptcy, allows the company to operate under the supervision of a receiver appointed by the Outagamie County Circuit Court.
"Despite the best efforts of our employees and ownership group, and the introduction of new products, this step is the best option at this point," said Doug Osterberg, Appleton Coated's president and chief executive officer.
"While the company has made significant progress in diversifying its product offerings and entering new markets, the overall business climate is very challenging, and operating under a state court-appointed receiver is the best route to transition the business to sustained profitability."
The company has 620 employees, all of whom are retained at this point, said Ann Whalen, senior vice president.
Declining demand, excess capacity and price competition in coated and uncoated paper markets were cited as problems facing the company, according to a release Thursday afternoon.
Digital taking a bite out of paper was also a big factor.
Appleton Coated's products are used in high-end commercial printing, textbook publishing, label papers, transactional printing and a variety of specialty, packaging and custom applications.
"In the printing and writing industry, the move to digital communications and unfavorable exchange rates have created overcapacity in the North American markets," Whalen said. "That's created falling prices and operating losses not only for us but for other companies in our industry."
The company operates three shifts in its mill. Its 620 employees include 181 salaried workers and 439 hourly workers.
United Steel Workers local 2-144 represents workers in the mill.
Osterberg said the company will be able to pay salary and wages and fund benefits for current employees.
The hope, said Whalen, is that a new buyer can be found to keep the mill running.
"The good news is that our paper machines are well-suited for transition into containerboard or other packaging products. We have a really experienced and motivated workforce," she said.
"We're optimistic that this process will culminate in finding a new buyer who will continue to operate the mill. We're talking to a number of interested parties."
Appleton Coated is privately owned. It was purchased three years ago by 10 members of its management team.
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