| þ | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|--------|---------------------------------------------------------------------------------------------------|

| o | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|---|----------------------------------------------------------------------------------------------------|

|   | CHESAPEAKE      CORPORATION                                 |   |
|--------|-------------------------------------------------------------|--------|
|   | (Exact      name of registrant as specified in its charter) |   |

| Virginia                                                            |   | 54-0166880                                |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |   | (I.R.S.      Employer Identification No.) |
|                                                                |   |                                      |
| 1021      East Cary Street                                          |   |                                      |
| Richmond,      Virginia                                             |   | 23219                                     |
| (Address      of principal executive offices)                       |   | Zip      Code                             |

| Registrant's      telephone number, including area code: |   | 804-697-1000 |   |
|----------------------------------------------------------|--------|--------------|--------|

|   | Not      Applicable                                                                           |   |
|--------|-----------------------------------------------------------------------------------------------|--------|
|   | (Former      name, former address, and former fiscal year, if changed since last      report) |   |

| Large      accelerated filer o | Accelerated      filer  þ | Non-accelerated      filer  o | Smaller      Reporting Company  o |
|--------------------------------|------------------------------------------|-----------------------------------------|---------------------------------------------|

----

----

| PART      I. FINANCIAL INFORMATION | PAGE      NUMBER                                                                                                            |   |
|------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|--------|
|                               |                                                                                                                        |   |   |
| Item      1.                       | Financial      Statements (Unaudited)                                                                                       |   |   |
|                               |                                                                                                                        |   |   |
|                               | Consolidated      Statements of Operations - Quarters and Nine Months ended September 28,      2008, and September 30, 2007 | 2      |   |
|                               |                                                                                                                        |   |   |
|                               | Consolidated      Balance Sheets at September 28, 2008, and December 30,2007                                                | 3      |   |
|                               |                                                                                                                        |   |   |
|                               | Consolidated      Statements of Cash Flows – Nine Months ended September 28, 2008, and      September 30, 2007        | 4      |   |
|                               |                                                                                                                        |   |   |
|                               | Notes      to Consolidated Financial Statements                                                                             | 5      |   |
|                               |                                                                                                                        |   |   |
| Item      2.                       | Management's      Discussion and Analysis of Financial Condition and Results of      Operations                             | 27     |   |
|                               |                                                                                                                        |   |   |
| Item      3.                       | Quantitative      and Qualitative Disclosures About Market Risk                                                             | 39     |   |
|                               |                                                                                                                        |   |   |
| Item      4.                       | Controls      and Procedures                                                                                                | 40     |   |
|                               |                                                                                                                        |
| PART      II. OTHER INFORMATION    |                                                                                                                        |
|                               |                                                                                                                        |   |   |
| Item      1.                       | Legal      Proceedings                                                                                                      | 41     |   |
|                               |                                                                                                                        |   |   |
| Item      1A.                      | Risk      Factors                                                                                                           | 41     |   |
|                               |                                                                                                                        |   |   |
| Item      6.                       | Exhibits                                                                                                                    | 42     |   |
|                               |                                                                                                                        |   |
| Signature                          | 43                                                                                                                          |   |

----

| PART      I - FINANCIAL INFORMATION                                 |                     |
|---------------------------------------------------------------------|--------------------------|
| Item      1: Financial Statements                                   |                     |
|                                                                |                     |
| CHESAPEAKE      CORPORATION AND SUBSIDIARIES                        |                     |
| CONSOLIDATED      STATEMENTS OF OPERATIONS                          |                     |
| (in      millions, except per share data; unaudited)                |                     |
|                                                                |                     |   |   |   |
|                                                                | Quarters Ended           |   | Nine Months Ended |   |
|                                                                |                     |   |   |   |   |   |   |   |
|                                                                | Sept.      28, 2008 |   | Sept.      30, 2007 |   | Sept.      28, 2008 |   | Sept.      30, 2007 |   |
|                                                                |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net      sales                                                      |                     | $ | 248.2 |   |   | $ | 266.4 |   |   | $ | 752.5 |   |   | $ | 789.3 |   |
|                                                                |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                            |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost      of products sold                                          |                     |   | 211.1 |   |   |   | 219.0 |   |   |   | 642.5 |   |   |   | 649.3 |   |
| Selling,      general and administrative expenses                   |                     |   | 31.3 |   |   |   | 33.7 |   |   |   | 102.7 |   |   |   | 100.0 |   |
| Goodwill      impairment charge                                     |                     |   | − |   |   |   | − |   |   |   | 215.5 |   |   |   | − |   |
| Restructuring      expenses, asset impairments and other exit costs |                     |   | 0.1 |   |   |   | 3.3 |   |   |   | 4.7 |   |   |   | 15.0 |   |
| Other      income, net                                              |                     |   | 3.1 |   |   |   | 1.0 |   |   |   | 6.4 |   |   |   | 2.0 |   |
| Operating      income (loss)                                        |                     |   | 8.8 |   |   |   | 11.4 |   |   |   | (206.5 | )  |   |   | 27.0 |   |

| Interest      expense, net                                                                                                                                                                                                                                                                  |   |   | 14.1   |   |   |   | 11.5    |   |   |   | 37.9   |   |   |   | 33.0    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Other      financing costs                                                                                                                                                                                                                                                                  |   |   | 2.6    |   |   |   | − |   |   |   | 2.6    |   |   |   | − |   |
| Loss      from continuing operations before taxes                                                                                                                                                                                                                                           |   |   | (7.9   | )      |   |   | (0.1    | )      |   |   | (247.0 | )      |   |   | (6.0    | )      |
| Income      tax benefit                                                                                                                                                                                                                                                                     |   |   | (1.8   | )      |   |   | (4.9    | )      |   |   | (5.8   | )      |   |   | (2.1    | )      |
| (Loss)      income from continuing operations                                                                                                                                                                                                                                               |   | $      | (6.1   | )      |   | $      | 4.8     |   |   | $      | (241.2 | )      |   | $      | (3.9    | )      |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |
| Discontinued      operations:                                                                                                                                                                                                                                                               |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |
|  Loss      from discontinued operations, net of income tax expense of $0.7 and $0.5      for the quarters ended September 28, 2008 and September 30, 2007,      respectively, and $1.6 and $1.4 for the nine months ended September 28,      2008 and September 30, 2007, respectively |   |   | (2.2   | )      |   |   | (0.5    | )      |   |   | (35.9  | )      |   |   | (1.6    | )      |
| Net      (loss) income                                                                                                                                                                                                                                                                      |   | $      | (8.3   | )      |   | $      | 4.3     |   |   | $      | (277.1 | )      |   | $      | (5.5    | )      |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |
| Basic      earnings per share:                                                                                                                                                                                                                                                              |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |
| (Loss)      income from continuing operations                                                                                                                                                                                                                                               |   | $      | (0.31  | )      |   | $      | 0.25    |   |   | $      | (12.37 | )      |   | $      | (0.20   | )      |
| Discontinued      operations                                                                                                                                                                                                                                                                |   |   | (0.11  | )      |   |   | (0.03   | )      |   |   | (1.84  | )      |   |   | (0.08   | )      |
| Net      (loss) income                                                                                                                                                                                                                                                                      |   | $      | (0.42  | )      |   | $      | 0.22    |   |   | $      | (14.21 | )      |   | $      | (0.28   | )      |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |
| Diluted      earnings per share:                                                                                                                                                                                                                                                            |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |
| (Loss)      income from continuing operations                                                                                                                                                                                                                                               |   | $      | (0.31  | )      |   | $      | 0.25    |   |   | $      | (12.37 | )      |   | $      | (0.20   | )      |
| Discontinued      operations                                                                                                                                                                                                                                                                |   |   | (0.11  | )      |   |   | (0.03   | )      |   |   | (1.84  | )      |   |   | (0.08   | )      |
| Net      (loss) income                                                                                                                                                                                                                                                                      |   | $      | (0.42  | )      |   | $      | 0.22    |   |   | $      | (14.21 | )      |   | $      | (0.28   | )      |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |
| Weighted      average number of common shares outstanding:                                                                                                                                                                                                                                  |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |
| Basic                                                                                                                                                                                                                                                                                       |   |   | 19.5   |   |   |   | 19.4    |   |   |   | 19.5   |   |   |   | 19.4    |   |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |
| Diluted                                                                                                                                                                                                                                                                                     |   |   | 19.5   |   |   |   | 19.4    |   |   |   | 19.5   |   |   |   | 19.4    |   |
|                                                                                                                                                                                                                                                                                        |   |   |   |   |
|                                                                                                                                                                                                                                                                                        |
| The      accompanying Notes to Consolidated Financial Statements are an integral      part of the financialstatements.                                                                                                                                                                      |

----

CHESAPEAKE CORPORATION AND SUBSIDIARIES

|                                                       |   |  Sept.      28, 2008 |   |   |        Dec.      30, 2007 |   |
|------------------------------------------------------------|--------|---------------------------|--------|--------|--------------------------------|--------|
| ASSETS                                                     |   |                      |   |   |                           |   |   |   |
| Current      assets:                                       |   |                      |   |   |                           |   |   |   |
| Cash      and cash equivalents                             |   | $                         | 20.9   |   |                           | $      | 10.0 |   |
| Accounts      receivable (less allowance of $2.8 and $3.6) |   |                      | 156.3  |   |                           |   | 163.6 |   |
|                                                       |   |                      |   |   |                           |   |   |   |
| Inventories:                                               |   |                      |   |   |                           |   |   |   |
| Finished      goods                                        |   |                      | 70.6   |   |                           |   | 70.4 |   |
| Work-in-process                                            |   |                      | 22.7   |   |                           |   | 17.1 |   |
| Materials      and supplies                                |   |                      | 29.5   |   |                           |   | 33.9 |   |
| Total      inventories                                     |   |                      | 122.8  |   |                           |   | 121.4 |   |
|                                                       |   |                      |   |   |                           |   |   |   |
| Prepaid      expenses                                      |   |                      | 10.7   |   |                           |   | 13.0 |   |
| Income      taxes receivable                               |   |                      | 4.1    |   |                           |   | 6.3 |   |
| Other      current assets                                  |   |                      | 25.9   |   |                           |   | 16.9 |   |
| Total      current assets                                  |   |                      | 340.7  |   |                           |   | 331.2 |   |
|                                                       |   |                      |   |   |                           |   |   |   |
| Property,      plant and equipment, net                    |   |                      | 335.3  |   |                           |   | 358.7 |   |
| Goodwill                                                   |   |                      | 157.2  |   |                           |   | 387.4 |   |
| Other      assets                                          |   |                      | 103.4  |   |                           |   | 134.5 |   |
| Total      assets                                          |   | $                         | 936.6  |   |                           | $      | 1,211.8 |   |

| LIABILITIES      AND STOCKHOLDERS' (DEFICIT) EQUITY                                                                                              |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current      liabilities:                                                                                                                        |   |   |   |   |   |   |
| Accounts      payable                                                                                                                            |   | $      | 120.5  |   |   | $      | 147.2 |   |
| Accrued      expenses                                                                                                                            |   |   | 118.3  |   |   |   | 81.4 |   |
| Current      maturities of long-term debt                                                                                                        |   |   | 226.0  |   |   |   | 6.9 |   |
| Income      taxes payable                                                                                                                        |   |   | 4.4    |   |   |   | 1.8 |   |
| Total      current liabilities                                                                                                                   |   |   | 469.2  |   |   |   | 237.3 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                                                                              |   |   | 331.4  |   |   |   | 508.4 |   |
| Environmental      liabilities                                                                                                                   |   |   | 36.4   |   |   |   | 58.9 |   |
| Pensions      and postretirement benefits                                                                                                        |   |   | 19.7   |   |   |   | 36.4 |   |
| Deferred      income taxes                                                                                                                       |   |   | 42.1   |   |   |   | 42.3 |   |
| Long-term      income taxes payable                                                                                                              |   |   | 28.7   |   |   |   | 28.5 |   |
| Other      long-term liabilities                                                                                                                 |   |   | 9.6    |   |   |   | 17.1 |   |
| Total      liabilities                                                                                                                           |   |   | 937.1  |   |   |   | 928.9 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Stockholders'      (deficit) equity:                                                                                                             |   |   |   |   |   |   |   |   |
| Common      stock, $1 par value; authorized, 60 million shares; outstanding, 20.6      million shares and 19.9 million shares, respectively |   |   | 20.6   |   |   |   | 19.9 |   |
| Additional      paid-in-capital                                                                                                                  |   |   | 95.1   |   |   |   | 94.2 |   |
| Accumulated      other comprehensive income                                                                                                      |   |   | 60.3   |   |   |   | 67.5 |   |
| (Accumulated      deficit) retained earnings                                                                                                     |   |   | (176.5 | )      |   |   | 101.3 |   |
| Total      stockholders' (deficit) equity                                                                                                        |   |   | (0.5   | )      |   |   | 282.9 |   |
| Total      liabilities and stockholders' (deficit) equity                                                                                        |   | $      | 936.6  |   |   | $      | 1,211.8 |   |

----

CHESAPEAKE CORPORATION AND SUBSIDIARIES

|                                                                                                     |   | Nine      Months Ended |   |
|----------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                     |   | Sept.      28, 2008    |   |   | Sept.      30, 2007 |   |
| Operating      activities:                                                                               |   |                   |   |   |   |   |
| Net      loss                                                                                            |   | $                      | (277.1 | ) |   | $ | (5.5 | ) |
| Adjustments      to reconcile net loss to net cash (used in) provided by operating      activities: |   |                   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                       |   |                   | 38.6   |   |   |   | 39.1 |   |
| Goodwill      impairment charge                                                                          |   |                   | 215.5  |   |   |   | - |   |
| Other      financing costs                                                                               |   |                   | 2.6    |   |   |   | - |   |
| Environmental      indemnification                                                                       |   |                   | 32.7   |   |   |   | - |   |
| Deferred      income taxes                                                                               |   |                   | (12.1  | ) |   |   | (5.8 | ) |
| Defined      benefit pension and postretirement expense                                                  |   |                   | 1.7    |   |   |   | 7.0 |   |
| Gain      on sales of property, plant and equipment                                                      |   |                   | (3.1   | ) |   |   | (0.5 | ) |
| Changes      in operating assets and liabilities, net of acquisitions and      dispositions:             |   |                   |   |   |   |   |   |   |
| Accounts      receivable, net                                                                            |   |                   | (7.0   | ) |   |   | (8.0 | ) |
| Inventories                                                                                              |   |                   | (8.4   | ) |   |   | (8.5 | ) |
| Other      assets                                                                                        |   |                   | (0.9   | ) |   |   | 3.2 |   |
| Accounts      payable                                                                                    |   |                   | (19.6  | ) |   |   | (2.7 | ) |
| Accrued      expenses                                                                                    |   |                   | 13.9   |   |   |   | 12.2 |   |
| Income      taxes payable and receivable, net                                                            |   |                   | 6.2    |   |   |   | 1.1 |   |
| Contributions      to defined benefit pension plans                                                      |   |                   | (17.6  | ) |   |   | (18.7 | ) |
| Other                                                                                                    |   |                   | 5.5    |   |   |   | 2.5 |   |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Net      cash (used in) provided by operating activities                                                 |   |                   | (29.1  | ) |   |   | 15.4 |   |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Investing      activities:                                                                               |   |                   |   |   |   |   |   |   |
| Purchases      of property, plant and equipment                                                          |   |                   | (27.9  | ) |   |   | (33.7 | ) |
| Proceeds      from sales of property, plant and equipment                                                |   |                   | 22.0   |   |   |   | 3.0 |   |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Net      cash used in investing activities                                                               |   |                   | (5.9   | ) |   |   | (30.7 | ) |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Financing      activities:                                                                               |   |                   |   |   |   |   |   |   |
| Net      borrowings on lines of credit                                                                   |   |                   | 58.2   |   |   |   | 20.3 |   |
| Payments      on long-term debt                                                                          |   |                   | (1.9   | ) |   |   | (1.6 | ) |
| Debt      issue costs                                                                                    |   |                   | (11.5  | ) |   |   | (0.2 | ) |
| Dividends      paid                                                                                      |   |                   | -      |   |   |   | (8.5 | ) |
| Other                                                                                                    |   |                   | -      |   |   |   | 0.4 |   |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Net      cash provided by financing activities                                                           |   |                   | 44.8   |   |   |   | 10.4 |   |
| Effect      of exchange rate changes on cash and cash equivalents                                        |   |                   | 1.1    |   |   |   | 1.4 |   |
|                                                                                                     |   |                   |   |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents                                                    |   |                   | 10.9   |   |   |   | (3.5 | ) |
| Cash      and cash equivalents at beginning of period                                                    |   |                   | 10.0   |   |   |   | 7.8 |   |
| Cash      and cash equivalents at end of period                                                          |   | $                      | 20.9   |   |   | $ | 4.3 |   |

----

----

----

----

----

----

----

|                                                                                     |   | September      28, 2008 |                               |
|------------------------------------------------------------------------------------------|--------|-------------------------|------------------------------------|
|                                                                                     |   |                    | Fair      Value Measurements Using |   |
|                                                                                     |   | Level      1            |                               |   | Level      2 |   |   | Level      3 |   |   | Assets      and Liabilities at Fair Value |   |
| Assets:                                                                                  |   |                    |                               |   |   |   |   |   |   |   |   |   |
|       VEBA      trust assets                               |   | $                       | 5.3                                |   |   | $ | - |   |   | $ | - |   |   | $ | 5.3 |   |
|       Available      for sale securities                   |   |                    | 2.9                                |   |   |   | - |   |   |   | - |   |   |   | 2.9 |   |
|       Insurance      contract investment                   |   |                    | -                                  |   |   |   | 1.0 |   |   |   | - |   |   |   | 1.0 |   |
|           Total      assets            |   | $                       | 8.2                                |   |   | $ | 1.0 |   |   | $ | - |   |   | $ | 9.2 |   |
|                                                                                     |   |                    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities:                                                                             |   |                    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        Derivative      liabilities                    |   | $                       | -                                  |   |   | $ | 5.7 |   |   | $ | - |   |   | $ | 5.7 |   |
|            Total      liabilities |   | $                       | -                                  |   |   | $ | 5.7 |   |   | $ | - |   |   | $ | 5.7 |   |
|                                                                                     |   |                    |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (in      millions)                                                                      |   | Quarters      Ended      |   |   | Nine      Months Ended   |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                                                                    |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |
|                                                                                    |   |                     |   |   |                     |   |   |   |   |   |   |   |
| Net      (loss) income                                                                  |   | $                        | (8.3   | )      |                     | $      | 4.3 |   |   | $ | (277.1 | ) |   | $ | (5.5 | ) |
| Foreign      currency translation                                                       |   |                     | (8.5   | )      |                     |   | 5.0 |   |   |   | (8.5 | ) |   |   | 13.0 |   |
| Change      in fair market value of derivatives, net of tax                             |   |                     | (2.0   | )      |                     |   | (0.3 | ) |   |   | - |   |   |   | 1.6 |   |
| Amortization      of unrecognized amounts in net periodic benefit cost, net of      tax |   |                     | 0.3    |   |                     |   | 4.0 |   |   |   | 0.9 |   |   |   | 5.9 |   |
| Comprehensive      (loss) income                                                        |   | $                        | (18.5  | )      |                     | $      | 13.0 |   |   | $ | (284.7 | ) |   | $ | 15.0 |   |

| (in      millions)                                                           |   | Quarters      Ended      |   |   | Nine      Months Ended   |   |
|------------------------------------------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                                                                         |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |
|                                                                         |   |                     |   |   |                     |   |   |   |   |   |   |   |
| Employee-related      costs                                                  |   | $                        | 0.5    |   |                     | $      | 2.6 |   |   | $ | 3.8 |   |   | $ | 14.4 |   |
| Asset      impairments                                                       |   |                     | -      |   |                     |   | 0.7 |   |   |   | 0.2 |   |   |   | 0.2 |   |
| (Gain)      loss on asset sales, redeployment costs, and other exit    costs |   |                     | (0.4   | )      |                     |   | - |   |   |   | 0.7 |   |   |   | 0.4 |   |
| Total      restructuring expenses, asset impairment and other exit    costs  |   | $                        | 0.1    |   |                     | $      | 3.3 |   |   | $ | 4.7 |   |   | $ | 15.0 |   |

----

| (in      millions)                                                                                        |   | Employee-related      Costs |    |   | Asset      Impairments |   |    | Other      Exit Costs |   |   | Total   |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|------------------------|--------|---------|-----------------------|--------|--------|---------|--------|
| Balance      December 30, 2007                                                                            |   | $                           | 2.7     |   |                   | $      | — |                  |   | $      | 0.1     |   |   | $ | 2.8 |   |
| Restructuring      charges, asset impairments and other exit costs (benefits), continuing      operations |   |                        | 3.8     |   |                   |   | 0.2     |                  |   |   | 0.7     |   |   |   | 4.7 |   |
| Cash payments                                                                                             |   |                        | (3.6    | )      |                   |   | — |                  |   |   | (1.1    | )      |   |   | (4.7 | ) |
| Asset    impairments                                                                                      |   |                        | — |   |                   |   | (0.2    | )                     |   |   | — |   |   |   | (0.2 | ) |
| Gain on sale of fixed      assets                                                                         |   |                        | — |   |                   |   | — |                  |   |   | 0.6     |   |   |   | 0.6 |   |
| Other items – non      cash                                                                         |   |                        | (0.3    | )      |                   |   | — |                  |   |   | — |   |   |   | (0.3 | ) |
| Balance      September 28, 2008                                                                           |   |                        | 2.6     |   |                   |   | — |                  |   |   | 0.3     |   |   |   | 2.9 |   |

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| (in      millions) | Paperboard      Packaging |   | Plastic      Packaging |   | Total |   |
|--------------------|---------------------------|--------|------------------------|--------|-------|--------|

| Balance      December 30, 2007    |   | $      | 311.5  |   |   | $      | 75.9    |   |   | $      | 387.4  |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|
| Impairment loss                   |   |   | (215.5 | )      |   |   | — |   |   |   | (215.5 | )      |
| Foreign currency      translation |   |   | (8.9   | )      |   |   | (5.8    | )      |   |   | (14.7  | )      |
| Balance      September 28, 2008   |   | $      | 87.1   |   |   | $      | 70.1    |   |   | $      | 157.2  |   |

| 2008      (remaining 3 months) | $0.4 |
|--------------------------------|------|
| 2009                           | 1.6  |
| 2010                           | 1.6  |
| 2011                           | 1.6  |
| 2012                           | 1.6  |
| 2013                           | 1.6  |

----

----

| Impact      of accounting change on the Company's Consolidated Statements of      Operations: |
|-----------------------------------------------------------------------------------------------|

| (in      millions, except per share data) |   | Quarter      EndedSept. 30, 2007 |             |   | Nine      Months EndedSept. 30, 2007 |   |             |
|-------------------------------------------|--------|----------------------------------|------------------|--------|--------------------------------------|--------|------------------|
| Income      from continuing operations    |   |                             | $       1.1 |   |                                 |   | $       3.2 |   |
| Net      income                           |   |                             | 1.1              |   |                                 |   | 3.2              |   |
| Diluted      earnings per share           |   |                             | $0.06            |   |                                 |   | $0.16            |   |

----

| Impact      of accounting change on the Company’s Consolidated Balance      Sheets: |
|-------------------------------------------------------------------------------------------|

| (in      millions)                          |   |          |              |
|---------------------------------------------|--------|---------------|-------------------|
|                                        |   | Dec. 30, 2007 |              |
| Assets:                                     |   |          |              |
| Deferred      tax assets                    |   |               | $       (2.2 | ) |
| Other      long-term assets                 |   |          | 0.3               |   |
|                                        |   |          |              |   |
| Liabilities:                                |   |          |              |   |
| Pensions      and postretirement benefits   |   |          | (2.1              | ) |
| Deferred      tax liabilities               |   |          | (1.5              | ) |
|                                        |   |          |              |   |
| Stockholders'      equity:                  |   |          |              |   |
| Accumulated      other comprehensive income |   |          | 19.6              |   |
| Retained      earnings                      |   |          | (17.9             | ) |

| (in      millions)                                      | U.S.      Plans | Non-U.S.      Plans | OPEB   |
|---------------------------------------------------------|-----------------|---------------------|--------|
| Retained      earnings, net of tax                      | $(0.1)          | $(0.4)              | $(0.3) |
| Accumulated      other comprehensive income, net of tax | $0.2            | $0.1                | $0.1   |

|                                |   | Pension      Benefits    |   |   | Postretirement      Benefits Other Than Pensions |   |
|-------------------------------------|--------|--------------------------|--------|--------|--------------------------------------------------|--------|
| (in      millions)                  |   | U.S. Plans               |   |   | Non-U.S. Plans                                   |   |   |   |   |
| Quarters      ended:                |   | Sept.      28, 2008 |   |   | Sept.      30, 2007                         |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |
| Service      cost                   |   | $                        | -      |   |                                             | $      | - |   |   | $ | 1.4 |   |   | $ | 1.7 |   |   | $ | - |   |   | $ | - |   |
| Interest      cost                  |   |                     | 1.0    |   |                                             |   | 1.0 |   |   |   | 6.0 |   |   |   | 5.8 |   |   |   | 0.2 |   |   |   | 0.2 |   |
| Expected      return on plan assets |   |                     | (1.4   | )      |                                             |   | (1.2 | ) |   |   | (7.1 | ) |   |   | (6.4 | ) |   |   | - |   |   |   | - |   |
| Recognized      actuarial loss      |   |                     | 0.2    |   |                                             |   | 0.2 |   |   |   | 0.2 |   |   |   | 1.0 |   |   |   | 0.1 |   |   |   | 0.1 |   |
|                                |   |                     |   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      pension (benefit) expense  |   | $                        | (0.2   | )      |                                             | $      | - |   |   | $ | 0.5 |   |   | $ | 2.1 |   |   | $ | 0.3 |   |   | $ | 0.3 |   |

----

|                                |   | Pension      Benefits |   |   | Postretirement      Benefits Other Than Pensions |   |
|-------------------------------------|--------|-----------------------|--------|--------|--------------------------------------------------|--------|
| (in      millions)                  |   | U.S. Plans            |   |   | Non-U.S. Plans                                   |   |   |   |   |
| Nine      Months ended:             |   | Sept.      28, 2008   |   |   | Sept.      30, 2007                              |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |   | Sept.      28, 2008 |   |   | Sept.      30, 2007 |   |
| Service      cost                   |   | $                     | 0.1    |   |                                             | $      | 0.1 |   |   | $ | 4.3 |   |   | $ | 4.9 |   |   | $ | - |   |   | $ | - |   |
| Interest      cost                  |   |                  | 2.9    |   |                                             |   | 2.9 |   |   |   | 18.3 |   |   |   | 16.8 |   |   |   | 0.6 |   |   |   | 0.6 |   |
| Expected      return on plan assets |   |                  | (4.0   | )      |                                             |   | (3.7 | ) |   |   | (21.7 | ) |   |   | (19.0 | ) |   |   | - |   |   |   | - |   |
| Recognized      actuarial loss      |   |                  | 0.4    |   |                                             |   | 0.6 |   |   |   | 0.5 |   |   |   | 3.4 |   |   |   | 0.3 |   |   |   | 0.3 |   |
|                                |   |                  |   |   |                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      pension (benefit) expense  |   | $                     | (0.6   | )      |                                             | $      | (0.1 | )  |   | $ | 1.4 |   |   | $ | 6.1 |   |   | $ | 0.9 |   |   | $ | 0.9 |   |

----

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|  (in      millions)    |   | Third Quarter |   |   | Year to Date |   |
|-----------------------------|--------|---------------|--------|--------|--------------|--------|
|                        |   | 2008          |   |   | 2007         |   |   | 2008 |   |   | 2007 |   |
| Net      sales:             |   |          |   |   |         |   |   |   |   |   |   |   |
| Paperboard      Packaging   |   | $             | 206.3  |   |         | $      | 224.6 |   |   | $ | 611.8 |   |   | $ | 657.1 |   |
| Plastic      Packaging      |   |          | 41.9   |   |         |   | 41.8 |   |   |   | 140.7 |   |   |   | 132.2 |   |
| Consolidated      net sales |   | $             | 248.2  |   |         | $      | 266.4 |   |   | $ | 752.5 |   |   | $ | 789.3 |   |

| Operating      income:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Paperboard      Packaging                                                           |   | $      | 9.9    |   |   | $      | 15.1   |   |   | $      | 14.4   |   |   | $ | 37.6 |   |
| Plastic      Packaging                                                              |   |   | 2.6    |   |   |   | 3.1    |   |   |   | 11.0   |   |   |   | 16.1 |   |
| Corporate                                                                           |   |   | (3.6   | )      |   |   | (3.5   | )      |   |   | (11.7  | )      |   |   | (11.7 | ) |
| Goodwill      impairment charge                                                     |   |   | -      |   |   |   | -      |   |   |   | (215.5 | )      |   |   | - |   |
| Restructuring      expenses, asset impairments  and      other exit costs |   |   | (0.1   | )      |   |   | (3.3   | )      |   |   | (4.7   | )      |   |   | (15.0 | ) |
| Consolidated      operating income                                                  |   | $      | 8.8    |   |   | $      | 11.4   |   |   | $      | (206.5 | )      |   | $ | 27.0 |   |

| Depreciation      and amortization:             |   |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Paperboard      Packaging                       |   | $      | 10.7   |   |   | $      | 11.4   |   |   | $      | 32.6   |   |   | $ | 33.7 |   |
| Plastic      Packaging                          |   |   | 2.0    |   |   |   | 1.8    |   |   |   | 5.9    |   |   |   | 5.3 |   |
| Corporate                                       |   |   | -      |   |   |   | -      |   |   |   | 0.1    |   |   |   | 0.1 |   |
| Consolidated      depreciation and amortization |   | $      | 12.7   |   |   | $      | 13.2   |   |   | $      | 38.6   |   |   | $ | 39.1 |   |

| (in      millions)        |   | Sept.      28, 2008 |   |   | Dec.      30, 2007 |   |
|---------------------------|--------|--------------------------|--------|--------|-------------------------|--------|
| Identifiable      assets: |   |                     |   |   |                    |   |
| Paperboard      Packaging |   | $                        | 684.2  |   |                    | $      | 899.1 |   |
| Plastic      Packaging    |   |                     | 183.2  |   |                    |   | 207.8 |   |
| Corporate                 |   |                     | 69.2   |   |                    |   | 104.9 |   |
| Total                     |   | $                        | 936.6  |   |                    | $      | 1,211.8 |   |

|   |   |
|--------|--------|

----

| Item      2: | Management's      Discussion and Analysis of Financial Condition and Results of      Operations |
|--------------|-------------------------------------------------------------------------------------------------|

| Overview |  |
|----------|--|

|        (in      millions)                                      |   | Quarter      Ended     Sept. 28,      2008      |   |   | Quarter      EndedSept. 30, 2007 |   |   | Nine Months      EndedSept.      28, 2008 |   |   |  Nine      Months EndedSept. 30, 2007 |   |
|---------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|--------|----------------------------------|--------|--------|-------------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                                |   |  Net      Sales                                                                         |   |   |  OperatingIncome            |   |   |  Net      Sales                      |   |   |  OperatingIncome                      |   |   |  Net      Sales |   |   |  OperatingIncome |   |   |  Net      Sales |   |   |  OperatingIncome |   |
| Paperboard      Packaging                                           |   | $                                                                                            | 206.3  |   |                             | $      | 9.9    |                                      |   | $      | 224.6                                      |   |   | $ | 15.1 |   |   | $ | 611.8 |   |   | $ | 14.4 |   |   | $ | 657.1 |   |   | $ | 37.6 |   |
| Plastic      Packaging                                              |   |                                                                                         | 41.9   |   |                             |   | 2.6    |                                      |   |   | 41.8                                       |   |   |   | 3.1 |   |   |   | 140.7 |   |   |   | 11.0 |   |   |   | 132.2 |   |   |   | 16.1 |   |
| Corporate                                                           |   |                                                                                         | -      |   |                             |   | (3.6   | )                                         |   |   | -                                          |   |   |   | (3.5 | ) |   |   | - |   |   |   | (11.7 | ) |   |   | - |   |   |   | (11.7 | ) |
| Goodwill      impairment charge                                     |   |                                                                                         | -      |   |                             |   | -      |                                      |   |   | -                                          |   |   |   | - |   |   |   | - |   |   |   | (215.5 | ) |   |   | - |   |   |   | - |   |
| Restructuring      expenses, asset impairments and other exit costs |   |                                                                                         | -      |   |                             |   | (0.1   | )                                         |   |   | -                                          |   |   |   | (3.3 | ) |   |   | - |   |   |   | (4.7 | ) |   |   | - |   |   |   | (15.0 | ) |
|                                                                |   |                                                                                         |   |   |                             |   |   |                                      |   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                               |   | $                                                                                            | 248.2  |   |                             | $      | 8.8    |                                      |   | $      | 266.4                                      |   |   | $ | 11.4 |   |   | $ | 752.5 |   |   | $ | (206.5 | )  |   | $ | 789.3 |   |   | $ | 27.0 |   |

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| (in      millions)             |   |       |   |   |       |   |   | Increase/(Decrease) |   |
|--------------------------------|--------|------------|--------|--------|------------|--------|--------|---------------------|--------|
|                           |   |  2008 |   |   |  2007 |   |   | $              |   |   |  | % |  |
| Nine      Months:              |   |       |   |   |       |   |   |                |   |   |   |   |   |
| Net      sales                 |   | $          | 611.8  |   |       | $      | 657.1  |                |   | $ | (45.3 | ) |   |   | (6.9 | )      % |
| Operating      income          |   |       | 14.4   |   |       |   | 37.6   |                |   |   | (23.2 | ) |   |   | (61.7 | ) |
| Operating      income margin % |   |       | 2.4    | %      |       |   | 5.7    | %                   |   |   |   |   |   |   |   |   |
|                           |   |       |   |   |       |   |   |                |   |   |   |   |   |   |   |   |

| (in      millions)             |   |       |   |   |       |   |   | Increase/(Decrease) |   |
|--------------------------------|--------|------------|--------|--------|------------|--------|--------|---------------------|--------|
|                           |   |  2008 |   |   |  2007 |   |   | $              |   |   |  | % |  |
| Third      Quarter:            |   |       |   |   |       |   |   |                |   |   |   |   |   |
| Net      sales                 |   | $          | 206.3  |   |       | $      | 224.6  |                |   | $ | (18.3 | ) |   |   | (8.1 | )      % |
| Operating      income          |   |       | 9.9    |   |       |   | 15.1   |                |   |   | (5.2 | ) |   |   | (34.4 | ) |
| Operating      income margin % |   |       | 4.8    | %      |       |   | 6.7    | %                   |   |   |   |   |   |   |   |   |
|                           |   |       |   |   |       |   |   |                |   |   |   |   |   |   |   |   |

----

| (in      millions)                        |   |       |   |       |   |   | Increase/(Decrease)  |   |
|-------------------------------------------|--------|------------|--------|------------|--------|--------|---------------------------|--------|
|                                      |   |  2008 |   |  2007 |   |   | $                    |   |   |   | % |   |
| Nine      Months:                         |   |       |   |       |   |   |                      |   |   |   |   |   |   |   |
| Net      sales                            |   | $          | 140.7  |       |   |   | $                         | 132.2  |   |   | $ | 8.5 |   |   |   | 6.4 |  % |
| Operating      income                     |   |       | 11.0   |       |   |   |                      | 16.1   |   |   |   | (5.1 | ) |   |   | (31.7 | ) |
| Operating      income  margin % |   |       | 7.8    |       | %      |   |                      | 12.2   | % |   |   |   |   |   |   |   |   |
|                                      |   |       |   |       |   |   |                      |   |   |   |   |   |   |   |   |   |   |

| (in      millions)                        |   |       |   |   |       |   |   | Increase/(Decrease) |   |
|-------------------------------------------|--------|------------|--------|--------|------------|--------|--------|---------------------|--------|
|                                      |   |  2008 |   |   |  2007 |   |   | $              |   |   |   | % |   |
| Third      Quarter:                       |   |       |   |   |       |   |   |                |   |   |   |   |   |
| Net      sales                            |   | $          | 41.9   |   |       | $      | 41.8   |                |   | $ | 0.1 |   |   |   | 0.2 | % |
| Operating      income                     |   |       | 2.6    |   |       |   | 3.1    |                |   |   | (0.5 | ) |   |   | (16.1 | ) |
| Operating      income  margin % |   |       | 6.2    | %      |       |   | 7.4    | %                   |   |   |   |   |   |   |   |   |
|                                      |   |       |   |   |       |   |   |                |   |   |   |   |   |   |   |   |

----

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Forward-looking statements in the foregoing Management’s Discussionand Analysis of Financial Condition and Results of Operations include statementsthat are identified by the use of words or phrases including, but not limitedto, the following:  “will likely result,” “expected to,” “willcontinue,” “is anticipated,” “estimated,” “project,” “believe,” “expect” andwords or phrases of similar import.  Changes in the followingimportant factors, among others, could cause Chesapeake’s actual results todiffer materially from those expressed in any such forward-lookingstatements:  our inability to realize the full extent of the expectedsavings or benefits from restructuring or cost savings initiatives, and tocomplete such activities in accordance with their planned timetables and withintheir expected cost ranges; the effects of competitive products and pricing;changes in production costs, particularly for raw materials such as foldingcarton and plastics materials, and our ability to pass through increases in rawmaterial costs to our customers; fluctuations in demand; possible recessionarytrends in U.S. and global economies; changes in governmental policies andregulations; changes in interest rates and credit availability; changes inactuarial assumptions related to our pension and postretirement benefits plans;changes in our liabilities and cash funding obligations associated with ourdefined benefit pension plans; our ability to refinance our outstanding debtprior to the expiration of any applicable forbearance or other agreement withapplicable lenders, which raises substantial doubt about our ability to continueas a going concern; our ability to raise capital because of our reduction orlack of liquidity due to the delisting on the NYSE; fluctuations in foreigncurrency exchange rates; and other risks that are detailed from time to time inreports filed by Chesapeake with the Securities and ExchangeCommission.

| Item      3. | Quantitative      and Qualitative Disclosure about MarketRisk |
|--------------|---------------------------------------------------------------|

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| Item      4. | Controls      and Procedures |
|--------------|------------------------------|

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PART II - OTHER INFORMATION

| Item 1. | Legal      Proceedings |
|---------|------------------------|

| Item 1A | Risk      Factors |
|---------|-------------------|

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| (a)    | Exhibits: |
|--------|-----------|
|   | 3.1       | Amended      and Restated Bylaws of Chesapeake Corporation, as adopted April 23, 2008      (filed as Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q      for the quarter ended March 30, 2008) |
|   | 4.1       | Amendment      No. 7 dated July 15, 2008 to the Second Amended and Restated Credit      Agreement dated February 23, 2004 (filed as Exhibit 4.1 to the      Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 29,      2008) |
|   | 4.2       | Amendment      No. 8 dated as of September 28, 2008 to the Second Amended and Restated      Credit Agreement dated February 23, 2004, filedherewith |
|   | 10.1      | Order      and Consent Decree in the matter of Philip Morris USA v. Chesapeake      Corporation and WTM I Company (filed as Exhibit 10.1 to the Registrant’s      Quarterly Report on Form 10-Q for the quarter ended June 29,      2008) |
|   | 10.2      | Field      Group Pension Plan Recovery Plan (Revised July 2008), dated July 15, 2008      (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q      for the quarter ended June 29, 2008) |
|   | 18.1      | Letter      from PricewaterhouseCoopers LLP regarding Change in Accounting Principles      (filed as Exhibit 18.1 to the Registrant’s Quarterly Report on Form 10-Q      for the quarter ended June 29, 2008) |
|   | 31.1      | Certification      of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of      2002 |
|   | 31.2      | Certification      of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of      2002 |
|   | 32        | Certifications      of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of2002 |

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SIGNATURE

|                                    |   | CHESAPEAKE      CORPORATION         |
|-----------------------------------------|--------|-------------------------------------|
|                                    |   | (Registrant)                        |
|                                    |   |                                |
| Date:  November      12, 2008 | BY:    | /s/ Guy N. A. Faller                |
|                                    |   | Guy      N. A. Faller               |
|                                    |   | Controller                          |
|                                    |   | (Principal      Accounting Officer) |

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