Federal judge reviews NewPage, Verso merger

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PORTLAND — Since merging with NewPage, Verso Paper Corp. has announcedlayoffs of 610 people, including 300 at its Jay mill. Meanwhile, the mill in Rumford that Verso sold to Catalyst Paper laid off 50 workers.

Attorneys representing those laid-off or soon-to-be-laid-off workers made their case before a federal judge Monday afternoon that the closures are the result of Verso wielding too much influence in the North American market for coated paper and seeking to earn higher prices for their coated paper after cutting the supply.

The court battle playing out in U.S. District Court in Washington, D.C., is the extension of a fight over the closure of Verso’s mill in Bucksport, which was challenged in federal court in Maine. The International Aerospace and Machinists Union, representing about 58 former employees in Bucksport, lost its bid in January for an injunction to stop the mill from being sold to a scrap metal dealer.

Now, the union is asking U.S. District Court Judge Tanya S. Chutkan to reject or modify the terms of a settlement that antitrust regulators reached to allow Verso to buy its larger competitor NewPage.

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While the fate of the Bucksport mill is sealed, the union is asking the court to seek further concessions from Verso as a condition of the already completed acquisition of NewPage. The settlement required NewPage to sell its mills in Rumford and Biron, Wisconsin, to the Canadian Catalyst Paper Corp. beforebeing acquired by Verso.

Verso has argued its closures come in response to declining demand in North America for coated paper. From 2001 to 2014, closures at Verso and NewPage mills accounted for almost half of the drop in coated paper production capacity in North America, according to monthly market updates the company provided in court testimony.

Company officials have testified the Bucksport closure was not tied to the merger.

Economist George Hay wrote testimony on behalf of Verso in January stating the company would also have economic reasons for additional closures based just on declining demand forecasts.

Attorneys for the union have argued the Justice Department’s antitrust review was too narrow. The Justice Department said in May that some of the union’s argument fell outside of its scope of review under the Tunney Act.

The challenge to the Justice Department settlement could be rebuffed by the court, leaving the terms of the merger unchanged.

At the other end of the spectrum of possibilities, the judge could find the terms of the settlement are not in the public interest and order modifications to the terms. Rejection of those terms could be appealed and disputed again in court.

Kimberly Tucker, a Lincolnville attorney representing the union, wrote in an email that the judge did not issue a decision Monday. Tucker wrote that she expects the judge to issue a written decision soon.

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