Verso Corp., owner of the paper mill in West Duluth, has filed for bankruptcy protection, staggered by paper imports, the decline in catalog and magazine publishing and $2.8 billion in debts.

Verso, which is controlled by private equity firm Apollo Global Management, plans to seek approval for a plan that would shed $2.4 billion of its debt and cede ownership to its creditors, according to a company statement.

The company said the bankruptcy would have virtually no impact on its daily operations, and it is seeking to borrow up to $600 million through a debtor-in-possession, or DIP, loan to repay some debt and provide working capital.

Verso said it has support for the plan from a majority of its creditors in most classes of its debt. That could smooth the restructuring process, which needs to be approved by a formal vote of creditors.

The Memphis, Tenn.-based company employs 5,172 at eight manufacturing plants in six states, including the West Duluth mill, according to a filing in the U.S. Bankruptcy Court in Wilmington, Del. It estimated 2015 revenue at $3.3 billion.

In a separate filing with the U.S. Securities and Exchange Commission, Verso said it would continue operating as the debtor in possession and fashion a proposal that it described as a compromise between different camps of bond holders that had loaned money to Verso and New Page.

Verso’s products are used primarily in catalogs, magazines and glossy advertising brochures.

Verso had said in November that it was considering the sale of some of its paper mills - including the one in West Duluth - as it looked for a path through its financial troubles.

But in postings online on Tuesday, the company said that option was no longer being explored.

“While we initially contemplated the possibility of selling certain mills as part of the restructuring

effort, our anticipated plan of reorganization does not include the sale of any active mills,” the company reported.

Verso also said it “does not expect to close any of its mills as a direct result of the restructuring.”

The Duluth mill, which began operations in 1987, employs about 300 people.

Merger strategy goes off course

Apollo Global Management, which acquired control of Verso in 2006, brought in David Paterson, a former Georgia Pacific executive, nearly four years ago to run Verso as the chief executive officer.

The new CEO set out to merge Verso with bankrupt Ohio rival NewPage Holdings - which had owned the West Duluth mill - and use the larger scale to drive up prices for glossy paper and drive down production costs.

Although the merger was completed a year ago, analysts say the strategy was pushed off course by the surge in value of the U.S. dollar overseas as the global economy weakened.

The strong dollar made imports into the United States less expensive and opened the way for tons of low-cost paper to pare wholesale prices and cut into Verso sales revenue just as it attempted to amass $120 million for interest payments on debt scheduled to come due early in 2016.

Verso, which lost nearly $1 billion over the past five years, was kept open by loans from bond holders looking for ways to make money off their investments.

In a typical Chapter 11 bankruptcy, the company’s shares of stock lose all their value and are never traded or used again. The largest bond holders usually take control of the business, reorganize it and, if successful, recover their money by having the reconstituted company sell new stock to the public.

Verso did not detail the compromise proposed in the SEC filing, although analysts say it appears to include a proposal for bond holders to give up their debt claims and instead take on new shares of stock in Verso.

“While filing for Chapter 11 protection was a difficult decision, we are pleased that we enter this process with strong creditor support. We have worked together with a broad spectrum of financial creditors to develop a restructuring plan to eliminate $2.4 billion of our outstanding debt and to exit the Chapter 11 process in a short timeframe,” Paterson said in a statement released by the company.

Paterson also said Verso’s “impending financial obligations made it apparent that action was needed.”

Reuters, the Memphis (Tenn.) Commercial Appeal and the News Tribune contributed to this report.