MEMPHIS, Tennessee -- Paper manufacturer Verso Corp. filed for chapter 11 bankruptcy protection Tuesday, its business battered by the turn to online channels that drove down demand for its products.

Verso President and Chief Executive David J. Paterson said in a news release the company has worked "to develop a restructuring plan to eliminate $2.4 billion of our outstanding debt" and exit bankruptcy "in a short time frame."

The Memphis, Tenn., company has been trying to work out a restructuring of its overloaded balance sheet. Verso said it expects to reach an agreement with "certain creditors" and obtain a bankruptcy-financing package of up to $600 million to support continued day-to-day operations.

Once the reorganization terms are finalized, Verso said, debtholders will swap their claims for equity in a reorganized company. "At least a majority in principal amount of most classes of funded debt of Verso and its subsidiaries," are expected to be on board with the agreement, according to the news release.

The filing came after Verso exercised grace periods on payments due on major issues of bonds to engage in talks about its "cash flow and liquidity concerns."

The company had rocky relationships with bondholders during the acquisition of NewPage Corp., spending a year battling bondholder dissatisfaction and regulatory troubles before closing a deal it had hoped would allow it to survive. At the time, Verso said the NewPage acquisition was its only chance to avoid bankruptcy.

"Since Verso acquired NewPage Holdings Inc. in January 2015, a confluence of external factors, including an accelerated and unprecedented decline in demand for our products, a significant increase in foreign imports resulting from a strong U.S. dollar relative to foreign currencies, and Verso's impending financial obligations made it apparent that action was needed," Mr. Paterson said in the news release.

Talks of a merger between the companies first began during NewPage's bankruptcy case, which concluded in 2012. Verso at the time was a healthier, but still debt-laden, competitor. NewPage rejected the idea then, saying it would take too long and be too risky due to antitrust concerns. Instead, NewPage exited bankruptcy protection under the control of its lenders after slashing billions of dollars in debt from its balance sheet.

In the years that followed, Verso's balance sheet grew increasingly unstable, and a deal with NewPage emerged as a way to stabilize the company.

Verso warned last year that it might have to file for bankruptcy protection if asset sales didn't raise enough cash to preserve the business.

Investors heeded the warning that Verso was in deep financial trouble and retreated from the stock which has been trading in penny-stock territory.

Cash-strapped Verso has been selling off assets after shuttering large swaths of its operations in Maine and Kentucky as demand for its products continues to decline.

The company is backed by Apollo Global Management LLC, which formed Verso in 2006 after buying the coated-paper arm of International Paper Co. Much of the paper Verso produces is used for magazines and catalogs, a market that has suffered as retailers have moved to online channels.