**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**(Mark      One)**

**333-142283**

**Verso      Paper Holdings LLC**

** **

**Delaware**

**56-2597634**

**6775      Lenox Center Court, Ste 400**

**Memphis,      Tennessee 38115**

**(901)      369-4100**

|                                   |   | (check                one):                              |   |                                             |
|----------------------------------------|--------|----------------------------------------------------------|--------|--------------------------------------------------|
| Large                Accelerated Filer |   | Accelerated                Filer     |   | Non-Accelerated                Filer ü |

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**TABLE      OF CONTENTS**

|                        |   |                                   |   | **Page**                                                                                                                                                                                                  |
|-----------------------------|--------|----------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Part I.**            |   | **FINANCIAL              INFORMATION** |   |                                                                                                                                                                                                      |
|                        |   | Item              1.                   |   | Unaudited              Financial Statements of Verso Paper Holdings LLC              (Successor) and Coated and Supercalendered Papers Division of              International Paper Company (Predecessor) |   | 3 |
|                        |   |                                   |   | Notes              to Successor’s Unaudited Condensed Consolidated              Financial Statements                                                                                                |   | 7 |
|                        |   |                                   |   | Notes              to Predecessor’s Unaudited Condensed Combined              Financial Statements                                                                                                  |   | 21 |
|                        |   | Item              2.              |   | Management’s              Discussion and Analysis of Financial Condition              and Results of Operations                                                                                     |   | 24 |
|                        |   | Item              3.              |   | Quantitative              and Qualitative Disclosures About Market              Risk                                                                                                                      |   | 35 |
|                        |   | Item              4T.             |   | Controls              and Procedures                                                                                                                                                                      |   | 36 |
|                        |   |                                   |   |                                                                                                                                                                                                      |   |   |
| **Part                II.** |   | **OTHER                INFORMATION**   |   |                                                                                                                                                                                                      |
|                        |   | Item              1.              |   | Legal              Proceedings                                                                                                                                                                       |   | 37 |
|                        |   | Item              1A.             |   | Risk              Factors                                                                                                                                                                            |   | 37 |
|                        |   | Item              2.              |   | Unregistered              Sales of Equity Securities and Use of              Proceeds                                                                                                                |   | 37 |
|                        |   | Item              3.              |   | Defaults              Upon Senior Securities                                                                                                                                                         |   | 37 |
|                        |   | Item                            4.     |   | Submission              of Matters to a Vote of Security              Holders                                                                                                                             |   | 37 |
|                        |   | Item              5.              |   | Other              Information                                                                                                                                                                            |   | 37 |
|                        |   | Item                6.                 |   | Exhibits                                                                                                                                                                                             |   | 37 |
|                        |   |                                   |   |                                                                                                                                                                                                      |   |   |
|                        |   |                                   |   | SIGNATURES                                                                                                                                                                                                |   | 38 |
|                        |   |                                   |   | EXHIBIT              INDEX                                                                                                                                                                                |   | 39 |

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**PART      I.  FINANCIAL INFORMATION**

**ITEM      1.  UNAUDITED FINANCIAL STATEMENTS OF VERSO PAPER      HOLDINGS LLC (SUCCESSOR) AND COATED AND SUPERCALENDERED PAPERS DIVISION OF      INTERNATIONAL PAPER COMPANY (PREDECESSOR)**

| **VERSO                  PAPER HOLDINGS LLC**                                                                |
|-------------------------------------------------------------------------------------------------------------------|
|                                                                                     |
| **UNAUDITED                  CONDENSED CONSOLIDATED BALANCE SHEETS**                                         |
|                                                                                     |
|                                                                                                              |   | **September                  30,** |   |   | **December                  31,** |   |
| (In                  thousands of U.S. dollars)                                                                   |   | **2007** |   |   | **2006** |   |
|                                                                                                              |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |
| **ASSETS**                                                                                                        |   |   |   |   |   |   |
| Current                  Assets                                                                                   |   |   |   |   |   |   |
| Cash                                                                                                              |   | $ | 26,879 |   |   | $ | 112,448 |   |
| Accounts                  receivable - net                                                                        |   |   | 113,212 |   |   |   | 113,489 |   |
| Accounts                  receivable from International Paper Company - net                                       |   |   | 12,466 |   |   |   | 8,217 |   |
| Inventories                                                                                                       |   |   | 134,521 |   |   |   | 140,503 |   |
| Prepaid                  expenses and other assets                                                                |   |   | 7,413 |   |   |   | 5,880 |   |
| Total                  Current Assets                                                                             |   |   | 294,491 |   |   |   | 380,537 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Property,                  plant & equipment - net                                                            |   |   | 1,170,499 |   |   |   | 1,212,002 |   |
| Intangibles                  & other assets - net                                                             |   |   | 95,000 |   |   |   | 89,304 |   |
| Goodwill                                                                                                          |   |   | 10,551 |   |   |   | 10,551 |   |
| Total                  Assets                                                                                     |   | $ | 1,570,541 |   |   | $ | 1,692,394 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| **LIABILITIES                  AND MEMBERS' EQUITY**                                                              |   |   |   |   |   |   |   |   |
| Current                  Liabilities                                                                              |   |   |   |   |   |   |   |   |
| Accounts                  payable                                                                                 |   | $ | 122,558 |   |   | $ | 117,103 |   |
| Accounts                  payable to International Paper Company                                                  |   |   | 11,501 |   |   |   | 29,273 |   |
| Accrued                  liabilities                                                                              |   |   | 68,853 |   |   |   | 80,200 |   |
| Current                  maturities of long-term debt                                                             |   |   | 2,850 |   |   |   | 2,850 |   |
| Total                  Current Liabilities                                                                        |   |   | 205,762 |   |   |   | 229,426 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                   |   |   | 1,154,300 |   |   |   | 1,156,438 |   |
| Other                  liabilities                                                                                |   |   | 25,438 |   |   |   | 26,817 |   |
| Total                  liabilities                                                                                |   |   | 1,385,500 |   |   |   | 1,412,681 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| Commitments                  and contingencies (Note 11)                                                          |   |   | - |   |   |   | - |   |
| Members'                  equity                                                                                  |   |   | 185,041 |   |   |   | 279,713 |   |
| Total                  Liabilities And Members' Equity                                                            |   | $ | 1,570,541 |   |   | $ | 1,692,394 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |
| See                  notes to Successor's unaudited condensed consolidated financial                  statements. |   |   |   |   |   |   |   |   |

----

| **VERSO                  PAPER HOLDINGS LLC (SUCCESSOR) AND COATED &**         |
|----------------------------------------------------------------------------------------------------------------------------|
| **SUPERCALENDERED                  PAPERS DIVISION OF INTERNATIONAL PAPER COMPANY                  (PREDECESSOR)**    |
|                                                                     |
| **UNAUDITED                  CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF                  OPERATIONS**          |

|                                                                                                                                                                                                                                        |   | **Successor**                        |    |   | **Successor**                        |   |    | **Predecessor**                  |   |   | **Successor**                        |   |   | **Predecessor**                     |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|--------------------------------------|--------|---------|----------------------------------|--------|--------|--------------------------------------|--------|--------|-------------------------------------|-----------|
|                                                                                                                                                                                                                                        |   | **Consolidated**                     |    |   | **Consolidated**                     |   |    | **Combined**                     |   |   | **Consolidated**                     |   |   | **Combined**                        |      |
|                                                                                                                                                                                                                                        |   | **Three                    Months**  |    |   | **Two                    Months**    |   |    | **One                    Month** |   |   | **Nine                    Months**   |   |   | **Seven                    Months** |      |
|                                                                                                                                                                                                                                        |   | **Ended**                            |    |   | **Ended**                            |   |    | **Ended**                        |   |   | **Ended**                            |   |   | **Ended**                           |      |
|                                                                                                                                                                                                                                        |   | **September                    30,** |    |   | **September                    30,** |   |    | **July                    31,**  |   |   | **September                    30,** |   |   | **July                    31,**     |      |
| (In                    thousands of U.S. dollars)                                                                                                                                                                                           |   | **2007**                             |    |   | **2006**              |   |    | **2007**                         |   |   | **2006**                             |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |
| Net                    sales                                                                                                                                                                                                                |   | $                                    | 450,548 |   |                                 | $      | 298,825 |                             |   | $      | 135,377                              |   |   | $                                   | 1,182,956 |   |   | $ | 904,417 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Costs                    and expenses:                                                                                                                                                                                                      |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Cost                    of products sold - (exclusive of                                                                                                                                                                                    |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| depreciation                    and amortization)                                                                                                                                                                                           |   |                                 | 386,709 |   |                                 |   | 247,884 |                             |   |   | 112,689                              |   |   |                                | 1,035,903 |   |   |   | 771,576 |   |
| Depreciation                    and amortization                                                                                                                                                                                            |   |                                 | 31,355  |   |                                 |   | 18,744  |                             |   |   | 9,716                                |   |   |                                | 90,638    |   |   |   | 72,674 |   |
| Selling,                    general and administrative                                                                                                                                                                                      |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| expenses                                                                                                                                                                                                                                    |   |                                 | 17,376  |   |                                 |   | 5,228   |                             |   |   | 3,411                                |   |   |                                | 37,047    |   |   |   | 34,348 |   |
| Restructuring                    and other charges                                                                                                                                                                                          |   |                                 | 4,240   |   |                                 |   | 3,700   |                             |   |   | -                                    |   |   |                                | 16,483    |   |   |   | (322 | ) |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Operating                    income                                                                                                                                                                                                         |   |                                 | 10,868  |   |                                 |   | 23,269  |                             |   |   | 9,561                                |   |   |                                | 2,885     |   |   |   | 26,141 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Interest                    income                                                                                                                                                                                                          |   |                                 | (238    | )      |                                 |   | (501    | )                                |   |   | (4                                   | )      |   |                                | (1,333    | ) |   |   | (23 | ) |
| Interest                    expense                                                                                                                                                                                                         |   |                                 | 28,430  |   |                                 |   | 19,550  |                             |   |   | 1,255                                |   |   |                                | 85,355    |   |   |   | 8,414 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Income                    (loss) before income taxes                                                                                                                                                                                        |   |                                 | (17,324 | )      |                                 |   | 4,220   |                             |   |   | 8,310                                |   |   |                                | (81,137   | ) |   |   | 17,750 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Income                    tax expense                                                                                                                                                                                                       |   |                                 | -       |   |                                 |   | 75      |                             |   |   | 3,274                                |   |   |                                | -         |   |   |   | 6,993 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Net                    income (loss)                                                                                                                                                                                                        |   | $                                    | (17,324 | )      |                                 | $      | 4,145   |                             |   | $      | 5,036                                |   |   | $                                   | (81,137   | ) |   | $ | 10,757 |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Included                    in the financial statement line items above are                    related-party                                                                                                                                |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |
|                      transactions as follows (Notes 3 and 9, respectively):                                                                                                                                                            |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| Net                    sales                                                                                                                                                                                                                |   | $                                    | 26,847  |   |                                 | $      | 38,260  |                             |   | $      | 13,796                               |   |   | $                                   | 97,565    |   |   | $ | 83,797 |   |
| Purchases                    included in cost of products sold                                                                                                                                                                              |   |                                 | 4,401   |   |                                 |   | 1,048   |                             |   |   | 8,172                                |   |   |                                | 12,580    |   |   |   | 119,471 |   |
| Selling,                    general and administrative expenses                                                                                                                                                                             |   |                                 | 693     |   |                                 |   | -       |                             |   |   | 8,422                                |   |   |                                | 2,079     |   |   |   | 25,481 |   |
| Restructuring                    and other charges                                                                                                                                                                                          |   |                                 | 1,135   |   |                                 |   | 2,400   |                             |   |   | -                                    |   |   |                                | 4,646     |   |   |   | - |   |
|                                                                                                                                                                                                                                        |   |                                 |    |   |                                 |   |    |                             |   |   |                                 |   |   |                                |      |   |   |   |   |   |
| See                    notes to Successor's unaudited condensed consolidated financial                    statements                    and Predecessor's unaudited condensed                    combined financial statements.   |   |

----

| **VERSO                  PAPER HOLDINGS LLC**                                                                     |   |
|-------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| **UNAUDITED                  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS'                  EQUITY**    |   |
| **FOR                  THE PERIODS ENDED SEPTEMBER 30, 2006 AND 2007**                                            |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   | **Accumulated** |   |   |   |   |
|                                                                                                              |   |   |   |   |   |   |   | **Other** |   |   | **Total** |   |
|                                                                                                              |   |   |   |   | **Retained** |   |   | **Comprehensive** |   |   | **Members'** |   |
| (In                  thousands of U.S. dollars)                                                                   |   | **Paid-in-Capital** |   |   | **(Deficit)** |   |   | **Loss** |   |   | **Equity** |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Date                  of acquisition - August 1, 2006:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                  contributions                                                                            |   | $ | 288,889 |   |   | $ | - |   |   | $ | - |   |   | $ | 288,889 |   |
| Net                  income                                                                                       |   |   | - |   |   |   | 4,145 |   |   |   | - |   |   |   | 4,145 |   |
| Ending                      balance - September                      30, 2006                                     |   | $  | 288,889 |   |   | $  | 4,145 |   |   | $ |   |   |   | $ | 293,034 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning                  balance - January 1, 2007                                                              |   | $ | 289,286 |   |   | $ | (1,832 | ) |   | $ | (7,741 | ) |   | $ | 279,713 |   |
| Net                  loss                                                                                         |   |   | - |   |   |   | (81,137 | ) |   |   | - |   |   |   | (81,137 | ) |
| Other                  comprehensive income:                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Prior                  service cost amortization                                                |   |   | - |   |   |   | - |   |   |   | 588 |   |   |   | 588 |   |
| Comprehensive                  income (loss)                                                                      |   |   | - |   |   |   | (81,137 | ) |   |   | 588 |   |   |   | (80,549 | ) |
| Cash                  distribution                                                                                |   |   | - |   |   |   | (14,671 | ) |   |   | - |   |   |   | (14,671 | ) |
| Equity                  award expense                                                                             |   |   | 548 |   |   |   | - |   |   |   | - |   |   |   | 548 |   |
| Ending                  balance - September 30, 2007                                                              |   | $ | 289,834 |   |   | $ | (97,640 | ) |   | $ | (7,153 | ) |   | $ | 185,041 |   |
|                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  notes to Successor's unaudited condensed consolidated financial                  statements. |   |   |   |   |   |

----

| **VERSO                  PAPER HOLDINGS LLC (SUCCESSOR) AND COATED&**                                          |
|--------------------------------------------------------------------------------------------------------------------|
| **SUPERCALENDERED                  PAPERS DIVISION OF INTERNATIONAL PAPER COMPANY                  (PREDECESSOR)** |
|                          |

| **UNAUDITED                  CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH                  FLOWS** |
|--------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                    |   | **Successor**                            |    |   | **Successor**                       |   |       | **Predecessor**                   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|--------|-------------------------------------|--------|------------|-----------------------------------|--------|
|                                                                                                                                                                                                    |   | **Consolidated**                         |    |   | **Consolidated**                    |   |       | **Combined**                      |   |
|                                                                                                                                                                                                    |   | **Nine                  Months**         |    |   | **Two                  Months**     |   |       | **Seven                  Months** |   |
|                                                                                                                                                                                                    |   | **Ended                  September 30,** |    |   | **Ended                  July 31,** |   |
| (In                  thousands of U.S. dollars)                                                                                                                                                         |   | **2007**                                 |    |   | **2006**                            |   |       | **2006**                          |   |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |
| **Cash                  Flows From Operating Activities:**                                                                                                                                              |   |                                     |    |   |                                |   |       |                              |   |
| Net                  income (loss)                                                                                                                                                                      |   | $                                        | (81,137 | )      |                                | $      | 4,145      |                              |   | $ | 10,757 |   |
| Adjustments                  to reconcile net income to net                                                                                                                                             |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| cash                  provided by (used in) operating activities:                                                                                                                                       |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
|                    Depreciation and amortization                                                                                                                                                   |   |                                     | 90,638  |   |                                |   | 18,744     |                              |   |   | 72,674 |   |
|                    Amortization of debt issuance costs                                                                                                                                             |   |                                     | 4,068   |   |                                |   | 866        |                              |   |   | - |   |
|                    Loss (gain) on disposal of fixed assets                                                                                                                                         |   |                                     | 231     |   |                                |   | -          |                              |   |   | 1,262 |   |
|                    Other - net                                                                                                                                                                     |   |                                     | 1,137   |   |                                |   | -          |                              |   |   | 686 |   |
|                    Changes in assets and liabilities:                                                                                                                                              |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| Accounts                  receivable                                                                                                                                                                    |   |                                     | (3,972  | )      |                                |   | (34,216    | )                                 |   |   | 23,253 |   |
| Inventories                                                                                                                                                                                             |   |                                     | 5,983   |   |                                |   | 13,737     |                              |   |   | (55,256 | ) |
| Prepaid                  expenses and other assets                                                                                                                                                      |   |                                     | (13,471 | )      |                                |   | (19,951    | )                                 |   |   | (6,396 | ) |
| Accounts                  payable                                                                                                                                                                       |   |                                     | (12,317 | )      |                                |   | 40,063     |                              |   |   | (8,690 | ) |
| Accrued                  liabilities                                                                                                                                                                    |   |                                     | (13,037 | )      |                                |   | 25,639     |                              |   |   | 983 |   |
| Net                  cash provided by (used in) operating activities                                                                                                                                    |   |                                     | (21,877 | )      |                                |   | 49,027     |                              |   |   | 39,273 |   |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| **Cash                  Flows From Investing Activities:**                                                                                                                                              |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| Proceeds                  from sale of fixed assets                                                                                                                                                     |   |                                     | 1,788   |   |                                |   | -          |                              |   |   | 32 |   |
| Cash                  paid for acquisition                                                                                                                                                              |   |                                     | -       |   |                                |   | (1,374,093 | )                                 |   |   | - |   |
| Capital                  expenditures                                                                                                                                                                   |   |                                     | (48,671 | )      |                                |   | (8,049     | )                                 |   |   | (27,655 | ) |
| Net                  cash used in investing activities                                                                                                                                                  |   |                                     | (46,883 | )      |                                |   | (1,382,142 | )                                 |   |   | (27,623 | ) |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| **Cash                  Flows From Financing Activities:**                                                                                                                                              |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| Repayments                  of debt                                                                                                                                                                     |   |                                     | (2,138  | )      |                                |   | -          |                              |   |   | (18,754 | ) |
| Net                  proceeds from debt issuance                                                                                                                                                        |   |                                     | -       |   |                                |   | 1,142,718  |                              |   |   | - |   |
| Equity                  contributions (distributions)                                                                                                                                                   |   |                                     | (14,671 | )      |                                |   | 259,889    |                              |   |   | 7,105 |   |
| Net                  cash provided by (used in) financing activities                                                                                                                                    |   |                                     | (16,809 | )      |                                |   | 1,402,607  |                              |   |   | (11,649 | ) |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| **Change                  In Cash**                                                                                                                                                                     |   |                                     | (85,569 | )      |                                |   | 69,492     |                              |   |   | 1 |   |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| Cash:                                                                                                                                                                                                   |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| Beginning                  of period                                                                                                                                                                    |   |                                     | 112,448 |   |                                |   | -          |                              |   |   | 46 |   |
| End                  of period                                                                                                                                                                          |   | $                                        | 26,879  |   |                                | $      | 69,492     |                              |   | $ | 47 |   |
|                                                                                                                                                                                                    |   |                                     |    |   |                                |   |       |                              |   |   |   |   |
| See                  notes to Successor's unadudited condensed consolidated financial                  statements and Predecessor's unaudited condensed                  combined financial statements. |   |

----

**VERSO      PAPER HOLDINGS LLC (SUCCESSOR)**

**NOTES      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS      OF SEPTEMBER 30, 2007,**

**AND        FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30,        2007**

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**1.  BACKGROUND        AND BASIS OF PRESENTATION**

----

**2.  RECENT        ACCOUNTING DEVELOPMENTS**

***Fair      Value Measurements***
*Fair Value Measurements*

***Fair      Value Option for Financial Assets and Financial Liabilities***
*Fair Value Option for Financial      Assets and Financial Liabilities—including an amendment of FASB Statement No.      115, *

***Accounting      for Uncertainty in Income Taxes***
*Accounting for Uncertainty in Income Taxes—an      interpretation of FASB Statement No. 109*

***Accounting      for Certain Hybrid Financial Instruments***
*Accounting for Certain Hybrid Financial      Instruments—an Amendment of FASB Statements No. 133 and 140*

**3.  ACQUISITION**

----

**4.  SUPPLEMENTAL        FINANCIAL STATEMENT INFORMATION**

|                                                  |   | **September                  30,** |    |   | **December                  31,** |   |
|-------------------------------------------------------|--------|------------------------------------|---------|--------|-----------------------------------|--------|
| (In                  thousands of U.S. dollars)       |   | **2007**                           |    |   | **2006**                          |   |
|                                                  |   |                               |    |   |                              |   |
| Raw                  materials                        |   | $                                  | 22,030  |   |                              | $      | 22,147 |   |
| Woodyard                  logs                        |   |                               | 3,978   |   |                              |   | 5,026 |   |
| Work-in-process                                       |   |                               | 18,083  |   |                              |   | 19,012 |   |
| Finished                  goods                       |   |                               | 59,057  |   |                              |   | 63,894 |   |
| Replacement                  parts and other supplies |   |                               | 31,373  |   |                              |   | 30,424 |   |
| Inventories                                           |   | $                                  | 134,521 |   |                              | $      | 140,503 |   |

|                                                               |   | **Nine                  Months**   |   |   | **Two                  Months**    |   |
|--------------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                               |   | **Ended**                          |   |   | **Ended**                          |   |
|                                                               |   | **September                  30,** |   |   | **September                  30,** |   |
| (In                  thousands of U.S. dollars)                    |   | **2007**                           |   |   | **2006**                           |   |
|                                                               |   |                               |   |   |                               |   |
| Asset                  retirement obligations, beginning of period |   | $                                  | 11,855 |   |                               | $      | 12,643 |   |
| New                  liabilities                                   |   |                               | 310    |   |                               |   | - |   |
| Accretion                  expense                                 |   |                               | 450    |   |                               |   | 103 |   |
| Settlement                  of existing liabilities                |   |                               | (960   | )      |                               |   | (390 | ) |
| Adjustment                  to existing liabilities                |   |                               | 104    |   |                               |   | - |   |
| Asset                  retirement obligations, end of period       |   | $                                  | 11,759 |   |                               | $      | 12,356 |   |

----

**5.  INTANGIBLES      & OTHER ASSETS**

|                                                                                                                                                             |   | **September                  30,** |   |   | **December                  31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|--------|-----------------------------------|--------|
| (In                  thousands of U.S. dollars)                                                                                                                  |   | **2007**                           |   |   | **2006**                          |   |
|                                                                                                                                                             |   |                               |   |   |                              |   |
| Amortizable                  intangible assets:                                                                                                                  |   |                               |   |   |                              |   |
| Customer                    relationships - net of accumulated amortization of $1.4 million                    and $0.2                    million, respectively |   | $                                  | 11,870 |   |                              | $      | 13,070 |   |
| Patents                    - net of accumulated amortization of $0.13 million and $0.05                    million,                    respectively              |   |                               | 1,014  |   |                              |   | 1,100 |   |
| Total                  amortizable intangible assets                                                                                                             |   |                               | 12,884 |   |                              |   | 14,170 |   |
|                                                                                                                                                             |   |                               |   |   |                              |   |   |   |
| Unamortizable                  intangible assets:                                                                                                                |   |                               |   |   |                              |   |   |   |
| Trademarks                                                                                                                                                       |   |                               | 21,473 |   |                              |   | 21,473 |   |
|                                                                                                                                                             |   |                               |   |   |                              |   |   |   |
| Other                  assets:                                                                                                                                   |   |                               |   |   |                              |   |   |   |
| Financing                    costs-net of accumulated amortization of $6.3 million and $2.3                    million,                    respectively          |   |                               | 37,825 |   |                              |   | 41,893 |   |
| Deferred                  major repair                                                                                                                           |   |                               | 7,085  |   |                              |   | 6,008 |   |
| Deferred                  software cost-net of accumulated amortization of $0.7                  million                                                         |   |                               | 4,631  |   |                              |   | - |   |
| Replacement                  parts-net                                                                                                                           |   |                               | 2,126  |   |                              |   | 1,729 |   |
| Other                                                                                                                                                            |   |                               | 8,976  |   |                              |   | 4,031 |   |
| Total                  other assets                                                                                                                              |   |                               | 60,643 |   |                              |   | 53,661 |   |
|                                                                                                                                                             |   |                               |   |   |                              |   |   |   |
| Intangibles                  and other assets                                                                                                                    |   | $                                  | 95,000 |   |                              | $      | 89,304 |   |

----

**6.  LONG-TERM        DEBT**

|                                                             |     |   |                           |   |   | **September                  30,** |      |   | **December                  31,** |   |
|------------------------------------------------------------------|----------|--------|--------------------------------|--------|--------|------------------------------------|-----------|--------|-----------------------------------|--------|
| (In                  thousands of U.S. dollars)                  | Maturity |   | Rate                           |   |   | **2007**                           |      |   | **2006**                          |   |
|                                                             |     |   |                           |   |   |                               |      |   |                              |   |
| Term                  Loan B                                     | 8/1/2013 |   | Libor                  + 1.75% |   |   | $                                  | 257,150   |   |                              | $      | 259,288 |   |
| Second                  Priority Senior Secured Notes - Fixed    | 8/1/2014 |   |  9.13                     | %      |   |                               | 350,000   |   |                              |   | 350,000 |   |
| Second                  Priority Senior Secured Notes - Floating | 8/1/2014 |   | Libor                  + 3.75% |   |   |                               | 250,000   |   |                              |   | 250,000 |   |
| Senior                  Subordinated Notes                       | 8/1/2016 |   |  11.38                    | %      |   |                               | 300,000   |   |                              |   | 300,000 |   |
|                                                             |     |   |                      |   |   |                               | 1,157,150 |   |                              |   | 1,159,288 |   |
| Less                  current maturities                         |     |   |                      |   |   |                               | (2,850    | )      |                              |   | (2,850 | ) |
| Long-term                  debt                                  |     |   |                      |   |   | $                                  | 1,154,300 |   |                              | $      | 1,156,438 |   |

**7.  RETIREMENT        PLANS**

----

|                                                      |   | **Three                  Months**  |   |   | **Nine                  Months**   |   |   | **Two                  Months**    |   |
|-----------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                      |   | **Ended**                          |   |   | **Ended**                          |   |   | **Ended**                          |   |
|                                                      |   | **September                  30,** |   |   | **September                  30,** |   |   | **September                  30,** |   |
| (In                  thousands of U.S. dollars)           |   | **2007**                           |   |   | **2007**                           |   |   | **2006**                           |   |
|                                                      |   |                               |   |   |                               |   |   |                               |   |
| Components                  of net periodic pension cost: |   |                               |   |   |                               |   |   |                               |   |
| Service                  cost                             |   | $                                  | 1,253  |   |                               | $      | 3,760  |                               |   | $ | 836 |   |
| Interest                  cost                            |   |                               | 149    |   |                               |   | 447    |                               |   |   | 77 |   |
| Amortization                  of prior service cost       |   |                               | 196    |   |                               |   | 588    |                               |   |   | 131 |   |
| Net                  periodic pension cost                |   | $                                  | 1,598  |   |                               | $      | 4,795  |                               |   | $ | 1,044 |   |

**8.  MANAGEMENT      EQUITY AWARDS**

**9.  RELATED        PARTY TRANSACTIONS**

----

**10.      RESTRUCTURING AND OTHER CHARGES**

**11.      COMMITMENTS AND CONTINGENCIES**

***Contingencies***

----

** **

----

**12.  INFORMATION      BY INDUSTRY SEGMENT**

|                                                                    |   | **Three                  Months**  |    |   | **Nine                  Months**   |   |      | **Two                  Months**    |   |
|-------------------------------------------------------------------------|--------|------------------------------------|---------|--------|------------------------------------|--------|-----------|------------------------------------|--------|
|                                                                    |   | **Ended**                          |    |   | **Ended**                          |   |      | **Ended**                          |   |
|                                                                    |   | **September                  30,** |    |   | **September                  30,** |   |      | **September                  30,** |   |
| (In                  thousands of U.S. dollars)                         |   | **2007**                           |    |   | **2007**                           |   |      | **2006**                           |   |
|                                                                    |   |                               |    |   |                               |   |      |                               |   |
| Net                  Sales:                                             |   |                               |    |   |                               |   |      |                               |   |
|   Coated                                                      |   | $                                  | 406,234 |   |                               | $      | 1,047,106 |                               |   | $ | 267,697 |   |
|   Pulp                                                        |   |                               | 34,953  |   |                               |   | 107,663   |                               |   |   | 24,389 |   |
|   Other                                                       |   |                               | 9,361   |   |                               |   | 28,187    |                               |   |   | 6,739 |   |
|            Total |   | $                                  | 450,548 |   |                               | $      | 1,182,956 |                               |   | $ | 298,825 |   |
|                                                                    |   |                               |    |   |                               |   |      |                               |   |   |   |   |
| Operating                  Income (Loss):                               |   |                               |    |   |                               |   |      |                               |   |   |   |   |
|   Coated                                                      |   | $                                  | 2,297   |   |                               | $      | (18,580   | )                                  |   | $ | 17,671 |   |
|   Pulp                                                        |   |                               | 8,850   |   |                               |   | 23,954    |                               |   |   | 5,576 |   |
|   Other                                                       |   |                               | (279    | )      |                               |   | (2,489    | )                                  |   |   | 22 |   |
|            Total |   | $                                  | 10,868  |   |                               | $      | 2,885     |                               |   | $ | 23,269 |   |
|                                                                    |   |                               |    |   |                               |   |      |                               |   |   |   |   |
| Depreciation                  and Amortization:                         |   |                               |    |   |                               |   |      |                               |   |   |   |   |
|   Coated                                                      |   | $                                  | 26,202  |   |                               | $      | 75,302    |                               |   | $ | 15,733 |   |
|   Pulp                                                        |   |                               | 4,478   |   |                               |   | 13,312    |                               |   |   | 2,668 |   |
|   Other                                                       |   |                               | 675     |   |                               |   | 2,024     |                               |   |   | 343 |   |
|            Total |   | $                                  | 31,355  |   |                               | $      | 90,638    |                               |   | $ | 18,744 |   |
|                                                                    |   |                               |    |   |                               |   |      |                               |   |   |   |   |
| Capital                  Spending:                                      |   |                               |    |   |                               |   |      |                               |   |   |   |   |
|   Coated                                                      |   | $                                  | 16,568  |   |                               | $      | 45,951    |                               |   | $ | 7,092 |   |
|   Pulp                                                        |   |                               | 521     |   |                               |   | 1,348     |                               |   |   | 941 |   |
|   Other                                                       |   |                               | 400     |   |                               |   | 1,372     |                               |   |   | 16 |   |
|            Total |   | $                                  | 17,489  |   |                               | $      | 48,671    |                               |   | $ | 8,049 |   |

----

**13.  DERIVATIVES**

**14.  UNAUDITED      CONDENSED CONSOLIDATING FINANCIAL INFORMATION**

----

| **Unaudited                  Condensed Consolidating Balance Sheet**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **as                  of December 31, 2006**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **Parent**  |   |   | **Subsidiary** |   |   | **Guarantor** |   |   | **Intercompany** |   |   |   |   |
| (In                  thousands of U.S. dollars)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | **Issuer** |   |   | **Issuer** |   |   | **Subsidiaries** |   |   | **Eliminations** |   |   | **Consolidated** |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $ | - |   |   | $ | - |   |   | $ | 380,537 |   |   | $ | - |   |   | $ | 380,537 |   |
| Property                  and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | - |   |   |   | - |   |   |   | 1,212,002 |   |   |   | - |   |   |   | 1,212,002 |   |
| Intercompany                  receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 1,232,950 |   |   |   | - |   |   |   | - |   |   |   | (1,232,950 | ) |   |   | - |   |
| Investment                  in subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 237,820 |   |   |   | - |   |   |   | - |   |   |   | (237,820 | ) |   |   | - |   |
| Non-current                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | - |   |   |   | - |   |   |   | 99,855 |   |   |   | - |   |   |   | 99,855 |   |
| Total                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $ | 1,470,770 |   |   | $ | - |   |   | $ | 1,692,394 |   |   | $ | (1,470,770 | ) |   | $ | 1,692,394 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                  AND MEMBERS’ EQUITY**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Current                  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $ | 34,619 |   |   | $ | - |   |   | $ | 194,807 |   |   | $ | - |   |   | $ | 229,426 |   |
| Intercompany                  payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | - |   |   |   | - |   |   |   | 1,232,950 |   |   |   | (1,232,950 | ) |   |   | - |   |
| Long-term                  debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,156,438 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,156,438 |   |
| Other                  long-term liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | - |   |   |   | - |   |   |   | 26,817 |   |   |   | - |   |   |   | 26,817 |   |
| Members’                  equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 279,713 |   |   |   | - |   |   |   | 237,820 |   |   |   | (237,820 | ) |   |   | 279,713 |   |
| Total                  liabilities and members’ equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | 1,470,770 |   |   | $ | - |   |   | $ | 1,692,394 |   |   | $ | (1,470,770 | ) |   | $ | 1,692,394 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certain                  previously reported amounts have been reclassified to agree with                  current                  presentation. The debt, debt issuance costs and accrued interest                  payable                  of the parent have been pushed down to the guarantor subsidiaries                  with a                  corresponding intercompany receivable recognized by the parent                  issuer,                  which is eliminated in                  consolidation, resulting in no impact to the consolidated                  totals. |   |

----

| **Unaudited                  Condensed Consolidating Balance Sheet**                |   |
|-----------------------------------------------------------------------------------------------|--------|
| **as                  of September 30, 2007**         |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   | **Parent** |   |   | **Subsidiary** |   |   | **Guarantor** |   |   | **Intercompany** |   |   |   |   |
| (In                  thousands of U.S. dollars)                                               |   | **Issuer** |   |   | **Issuer** |   |   | **Subsidiaries** |   |   | **Eliminations** |   |   | **Consolidated** |   |
| **ASSETS**                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                  assets                                                               |   | $ | - |   |   | $ | - |   |   | $ | 294,491 |   |   | $ | - |   |   | $ | 294,491 |   |
| Property                  and equipment, net                                                  |   |   | - |   |   |   | - |   |   |   | 1,170,499 |   |   |   | - |   |   |   | 1,170,499 |   |
| Intercompany                  receivable                                                      |   |   | 1,210,184 |   |   |   | - |   |   |   | - |   |   |   | (1,210,184 | ) |   |   | - |   |
| Investment                  in subsidiaries                                                   |   |   | 147,216 |   |   |   | - |   |   |   | - |   |   |   | (147,216 | ) |   |   | - |   |
| Non-current                  assets                                                           |   |   | - |   |   |   | - |   |   |   | 105,551 |   |   |   | - |   |   |   | 105,551 |   |
| Total                  assets                                                                 |   | $ | 1,357,400 |   |   | $ | - |   |   | $ | 1,570,541 |   |   | $ | (1,357,400 | ) |   | $ | 1,570,541 |   |
|                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **LIABILITIES                  AND MEMBERS’ EQUITY**                                    |   |   |   |   |   |   |   |   |   |
| Current                  liabilities                                                          |   | $ | 18,059 |   |   | $ | - |   |   | $ | 187,703 |   |   | $ | - |   |   | $ | 205,762 |   |
| Intercompany                  payable                                                         |   |   | - |   |   |   | - |   |   |   | 1,210,184 |   |   |   | (1,210,184 | ) |   |   | - |   |
| Long-term                  debt                                                               |   |   | 1,154,300 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,154,300 |   |
| Other                  long-term liabilities                                                  |   |   | - |   |   |   | - |   |   |   | 25,438 |   |   |   | - |   |   |   | 25,438 |   |
| Members’                  equity                                                        |   |   | 185,041 |   |   |   | - |   |   |   | 147,216 |   |   |   | (147,216 | ) |   |   | 185,041 |   |
| Total                  liabilities and members’ equity                                  |   | $ | 1,357,400 |   |   | $ | - |   |   | $ | 1,570,541 |   |   | $ | (1,357,400 | ) |   | $ | 1,570,541 |   |

----

| **Unaudited                Condensed Consolidating Statements of Operations**                   |
|------------------------------------------------------------------------------------------------------|
| **Three                Months Ended September 30, 2007**                                        |
|                                                                                                 |
|                                                                                                 |   | **Parent** |   |   | **Subsidiary** |   |   | **Guarantor** |   |   | **Intercompany** |   |   |   |   |
| (In                thousands of U.S. dollars)                                                        |   | **Issuer** |   |   | **Issuer** |   |   | **Subsidiaries** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                                             |   | $ | - |   |   | $ | - |   |   | $ | 450,548 |   |   | $ | - |   |   | $ | 450,548 |   |
| Cost                  of products sold (exclusive of depreciation and                  amortization) |   |   | - |   |   |   | - |   |   |   | 386,709 |   |   |   | - |   |   |   | 386,709 |   |
| Depreciation                and amortization                                                         |   |   | - |   |   |   | - |   |   |   | 31,355 |   |   |   | - |   |   |   | 31,355 |   |
| Selling,                general and adminstrative                                                    |   |   | - |   |   |   | - |   |   |   | 17,376 |   |   |   | - |   |   |   | 17,376 |   |
| Restructuring                and other charges                                                       |   |   | - |   |   |   | - |   |   |   | 4,240 |   |   |   | - |   |   |   | 4,240 |   |
| Interest                income                                                                       |   |   | (28,357 | ) |   |   | - |   |   |   | (238 | ) |   |   | 28,357 |   |   |   | (238 | ) |
| Interest                expense                                                                      |   |   | 28,357 |   |   |   | - |   |   |   | 28,430 |   |   |   | (28,357 | ) |   |   | 28,430 |   |
| Equity                in net loss of subsidiaries                                                    |   |   | (17,324 | ) |   |   | - |   |   |   | - |   |   |   | 17,324 |   |   |   | - |   |
| Income                  income (loss) before income taxes                                       |   |   | (17,324 | ) |   |   | - |   |   |   | (17,324 | ) |   |   | 17,324 |   |   |   | (17,324 | ) |
| Income                tax (benefit) expense                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net                income (loss)                                                                     |   | $ | (17,324 | ) |   | $ | - |   |   | $ | (17,324 | ) |   | $ | 17,324 |   |   | $ | (17,324 | ) |

| **Unaudited                  Condensed Consolidating Statements of                  Operations**         |
|----------------------------------------------------------------------------------------------------------|
| **Nine                  Months Ended September 30, 2007**                                                |
|                                                                                                     |
|                                                                                                     |   | **Parent** |   |   | **Subsidiary** |   |   | **Guarantor** |   |   | **Intercompany**  |   |   |   |   |
| (In                  thousands of U.S. dollars)                                                          |   | **Issuer** |   |   | **Issuer** |   |   | **Subsidiaries** |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  sales                                                                               |   | $ | - |   |   | $ | - |   |   | $ | 1,182,956 |   |   | $ | - |   |   | $ | 1,182,956 |   |
| Cost                    of products sold (exclusive of depreciation and                    amortization) |   |   | - |   |   |   | - |   |   |   | 1,035,903 |   |   |   | - |   |   |   | 1,035,903 |   |
| Depreciation                  and amortization                                                           |   |   | - |   |   |   | - |   |   |   | 90,638 |   |   |   | - |   |   |   | 90,638 |   |
| Selling,                  general and adminstrative                                                      |   |   | - |   |   |   | - |   |   |   | 37,047 |   |   |   | - |   |   |   | 37,047 |   |
| Restructuring                  and other charges                                                         |   |   | - |   |   |   | - |   |   |   | 16,483 |   |   |   | - |   |   |   | 16,483 |   |
| Interest                  income                                                                         |   |   | (84,843 | ) |   |   | - |   |   |   | (1,333 | ) |   |   | 84,843 |   |   |   | (1,333 | ) |
| Interest                  expense                                                                        |   |   | 84,843 |   |   |   | - |   |   |   | 85,355 |   |   |   | (84,843 | ) |   |   | 85,355 |   |
| Equity                  in net loss of subsidiaries                                                      |   |   | (81,137 | ) |   |   | - |   |   |   | - |   |   |   | 81,137 |   |   |   | - |   |
| Income                    income (loss) before income taxes                                         |   |   | (81,137 | ) |   |   | - |   |   |   | (81,137 | ) |   |   | 81,137 |   |   |   | (81,137 | ) |
| Income                  tax (benefit) expense                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net                  income (loss)                                                                       |   | $ | (81,137 | ) |   | $ | - |   |   | $ | (81,137 | ) |   | $ | 81,137 |   |   | $ | (81,137 | ) |

----

| **Unaudited                        Condensed Consolidating Statements of Cash Flows**              |
|-----------------------------------------------------------------------------------------------------------------------------|
| **Nine                        Months Ended September 30, 2007**           |

|                                                                         |   |  **Parent** |   |   |  **Subsidiary** |   |   |  **Guarantor** |   |   | **Intercompany** |   |   |        |   |
|------------------------------------------------------------------------------|--------|------------------|--------|--------|----------------------|--------|--------|---------------------|--------|--------|------------------|--------|--------|------------------|--------|
| (In                    thousands of U.S. dollars)                            |   | **Issuer**       |   |   | **Issuer**           |   |   | **Subsidiaries**    |   |   | **Eliminations** |   |   | **Consolidated** |   |
|                                                                         |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |
| Net                    cash used in operating activities                     |   | $                | -      |   |                 | $      | -      |                |   | $      | (21,877          | )      |   |             |   |   | $ | (21,877 | ) |
|                                                                         |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |
| Cash                    flows from investing activities:                     |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |
| Proceeds                    from sale of fixed assets                        |   |             | -      |   |                 |   | -      |                |   |   | 1,788            |   |   |             | -      |   |   |   | 1,788 |   |
| Capital                    expenditures                                      |   |             | -      |   |                 |   | -      |                |   |   | (48,671          | )      |   |             | -      |   |   |   | (48,671 | ) |
|                                                                         |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |   |
| Net                    cash used in investing activities                     |   |             | -      |   |                 |   | -      |                |   |   | (46,883          | )      |   |             | -      |   |   |   | (46,883 | ) |
|                                                                         |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |   |
| Cash                    flows from financing activities:                     |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |   |
| Equity                    distributions                                      |   |             | -      |   |                 |   | -      |                |   |   | (14,671          | )      |   |             | -      |   |   |   | (14,671 | ) |
|  Repayment                      of advances to subsidiaries             |   |             | 2,138  |   |                 |   | -      |                |   |   | (2,138           | )      |   |             | -      |   |   |   | - |   |
|  Payments                      on long-term debt under credit agreement |   |             | (2,138 | )      |                 |   | -      |                |   |   | -                |   |   |             | -      |   |   |   | (2,138 | ) |
|                                                                         |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |   |
| Net                      cash used in financing activities                   |   |             | -      |   |                 |   | -      |                |   |   | (16,809          | )      |   |             | -      |   |   |   | (16,809 | ) |
| Net                      change in cash and cash equivalents                 |   |             | -      |   |                 |   | -      |                |   |   | (85,569          | )      |   |             | -      |   |   |   | (85,569 | ) |
| Cash                    and cash equivalents:                                |   |             |   |   |                 |   |   |                |   |   |             |   |   |             |   |   |   |   |   |   |
| Beginning                    of period                                       |   |             | -      |   |                 |   | -      |                |   |   | 112,448          |   |   |             | -      |   |   |   | 112,448 |   |
| End                    of period                                             |   | $                | -      |   |                 | $      | -      |                |   | $      | 26,879           |   |   | $                | -      |   |   | $ | 26,879 |   |

----

**COATED      AND SUPERCALENDERED PAPERS DIVISION OF INTERNATIONAL PAPER COMPANY      (PREDECESSOR)**

**NOTES      TO UNAUDITED CONDENSED COMBINED FINANCIAL      STATEMENTS**

**FOR        THE ONE-MONTH AND SEVEN-MONTH PERIODS ENDED JULY 31, 2006**

----

**1.  BASIS          OF PRESENTATION**

**2.  RESTRUCTURING        AND OTHER CHARGES**

**3.  TRANSACTIONS      WITH IPCO AND AFFILIATES**

----

**4.  SUPPLEMENTAL        FINANCIAL STATEMENT INFORMATION**

**5.  INCOME        TAXES**

**6.  COMMITMENTS        AND CONTINGENCIES**

***Litigation***

----

**7.  INFORMATION        BY INDUSTRY SEGMENT**

|                                                                    |   | **One                  Month** |    |   | **Seven                  Months** |   |
|-------------------------------------------------------------------------|--------|--------------------------------|---------|--------|-----------------------------------|--------|
|                                                                    |   | **Ended**                      |    |   | **Ended**                         |   |
|                                                                    |   | **July                  31,**  |    |   | **July                  31,**     |   |
| (In                  thousands of U.S. dollars)                         |   | **2006**                       |    |   | **2006**                          |   |
|                                                                    |   |                           |    |   |                              |   |
| Net                  Sales:                                             |   |                           |    |   |                              |   |
|   Coated                                                      |   | $                              | 120,331 |   |                              | $      | 793,308 |   |
|   Pulp                                                        |   |                           | 11,915  |   |                              |   | 88,634 |   |
|   Other                                                       |   |                           | 3,131   |   |                              |   | 22,475 |   |
|            Total |   | $                              | 135,377 |   |                              | $      | 904,417 |   |
|                                                                    |   |                           |    |   |                              |   |   |   |
| Operating                  Income:                                      |   |                           |    |   |                              |   |   |   |
|   Coated                                                      |   | $                              | 7,821   |   |                              | $      | 17,903 |   |
|   Pulp                                                        |   |                           | 1,729   |   |                              |   | 7,413 |   |
|   Other                                                       |   |                           | 11      |   |                              |   | 825 |   |
|            Total |   | $                              | 9,561   |   |                              | $      | 26,141 |   |
|                                                                    |   |                           |    |   |                              |   |   |   |
| Depreciation                  and Amortization:                         |   |                           |    |   |                              |   |   |   |
|   Coated                                                      |   | $                              | 8,196   |   |                              | $      | 60,881 |   |
|   Pulp                                                        |   |                           | 1,355   |   |                              |   | 10,417 |   |
|   Other                                                       |   |                           | 165     |   |                              |   | 1,376 |   |
|            Total |   | $                              | 9,716   |   |                              | $      | 72,674 |   |

----

**ITEM 2.   MANAGEMENT’S      DISCUSSION AND ANALYSIS OF      FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The      following discussion and analysis of our financial condition and results of      operations covers periods prior to the acquisition of the      Company.  For comparison purposes, the results of operations for the      quarter and nine months ended September 30, 2006, are presented on a combined      basis, consisting of the results of the C&SC Papers division of      International Paper, our Predecessor, for the seven months ended July 31, 2006,      and our results, as the Successor to the C&SC Papers division, for the two      months ended September 30, 2006. Accordingly, the discussion and analysis of      historical periods does not fully reflect the significant impact that the      Acquisition had on our financial statements.  See “Management’s      Discussion and Analysis of Financial Condition and Results of Operations” in our      registration statement on Form S-4 for the year ended December 31, 2006, for      more information regarding the comparability of our Predecessor’s results of      operations.*

**Overview**

**Stand-Alone      Company**

**Financial        Summary**

----

**Results      of operations – comparison of third quarter 2007 to third quarter      2006**

|                                                                                                              |   |                               |    |   | **Combined**                       |   |    |                               |   |   |                           |   |
|-------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|--------|------------------------------------|--------|---------|------------------------------------|--------|--------|--------------------------------|--------|
|                                                                                                              |   | **Successor**                      |    |   | **Successor                  and** |   |    | **Successor**                      |   |   | **Predecessor**                |   |
|                                                                                                              |   | **Consolidated**                   |    |   | **Predecessor**                    |   |    | **Consolidated**                   |   |   | **Combined**                   |   |
|                                                                                                              |   | **Three                  Months**  |    |   | **Three                  Months**  |   |    | **Two                  Months**    |   |   | **One                  Month** |   |
|                                                                                                              |   | **Ended**                          |    |   | **Ended**                          |   |    | **Ended**                          |   |   | **Ended**                      |   |
|                                                                                                              |   | **September                  30,** |    |   | **September                  30,** |   |    | **September                  30,** |   |   | **July                  31,**  |   |
| (In                  thousands of U.S. dollars)                                                                   |   | **2007**                           |    |   | **2006**                           |   |    | **2006**                           |   |   | **2006**                       |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |
| Net                  sales                                                                                        |   | $                                  | 450,548 |   |                               | $      | 434,202 |                               |   | $      | 298,825                        |   |   | $ | 135,377 |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
| Costs                  and expenses:                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                      Cost of products sold - (exclusive of depreciation and                    amortization) |   |                               | 386,709 |   |                               |   | 360,573 |                               |   |   | 247,884                        |   |   |   | 112,689 |   |
|                    Depreciation and amortization                                                             |   |                               | 31,355  |   |                               |   | 28,460  |                               |   |   | 18,744                         |   |   |   | 9,716 |   |
|                    Selling, general and administrative expenses                                              |   |                               | 17,376  |   |                               |   | 8,639   |                               |   |   | 5,228                          |   |   |   | 3,411 |   |
|                    Restructuring and other charges                                                           |   |                               | 4,240   |   |                               |   | 3,700   |                               |   |   | 3,700                          |   |   |   | - |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                    Operating income                                                                          |   |                               | 10,868  |   |                               |   | 32,830  |                               |   |   | 23,269                         |   |   |   | 9,561 |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                    Interest income                                                                           |   |                               | (238    | )      |                               |   | (505    | )                                  |   |   | (501                           | )      |   |   | (4 | ) |
|                    Interest expense                                                                          |   |                               | 28,430  |   |                               |   | 20,805  |                               |   |   | 19,550                         |   |   |   | 1,255 |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                    Income (loss) before income taxes                                                         |   |                               | (17,324 | )      |                               |   | 12,530  |                               |   |   | 4,220                          |   |   |   | 8,310 |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                    Income tax expense                                                                        |   |                               | -       |   |                               |   | 3,349   |                               |   |   | 75                             |   |   |   | 3,274 |   |
|                                                                                                              |   |                               |    |   |                               |   |    |                               |   |   |                           |   |   |   |   |   |
|                    Net income (loss)                                                                         |   | $                                  | (17,324 | )      |                               | $      | 9,181   |                               |   | $      | 4,145                          |   |   | $ | 5,036 |   |

*Net      Sales*

----

*Cost      of sales*

*Selling,      general and administrative*

*Interest      expense*

*Restructuring      and other charges*

*Income      tax expense*

----

**Results      of operations – comparison of first nine months of 2007 to first nine months of      2006**

|                                                                                                              |   |                               |      |   | **Combined**                       |   |      |                                     |   |   |                              |   |
|-------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|-----------|--------|------------------------------------|--------|-----------|------------------------------------------|--------|--------|-----------------------------------|--------|
|                                                                                                              |   | **Successor**                      |      |   | **Successor                  and** |   |      | **Successor**                            |   |   | **Predecessor**                   |   |
|                                                                                                              |   | **Consolidated**                   |      |   | **Predecessor**                    |   |      | **Consolidated**                         |   |   | **Combined**                      |   |
|                                                                                                              |   | **Nine                  Months**   |      |   | **Nine                  Months**   |   |      | **Two                  Months**          |   |   | **Seven                  Months** |   |
|                                                                                                              |   | **Ended**                          |      |   |  **Ended**                    |   |      | **Ended**                                |   |   | **Ended**                         |   |
|                                                                                                              |   | **September                  30,** |      |   | **September                  30,** |   |      |  **September                  30,** |   |   | **July                  31,**     |   |
| (In                  thousands of U.S. dollars)                                                                   |   | **2007**                           |      |   | **2006**                           |   |      | **2006**                                 |   |   | **2006**                          |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |
| Net                  sales                                                                                        |   | $                                  | 1,182,956 |   |                               | $      | 1,203,242 |                                     |   | $      | 298,825                           |   |   | $ | 904,417 |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
| Costs                  and expenses:                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                      Cost of products sold - (exclusive of depreciation and                    amortization) |   |                               | 1,035,903 |   |                               |   | 1,019,460 |                                     |   |   | 247,884                           |   |   |   | 771,576 |   |
|                    Depreciation and amortization                                                             |   |                               | 90,638    |   |                               |   | 91,418    |                                     |   |   | 18,744                            |   |   |   | 72,674 |   |
|                    Selling, general and administrative expenses                                              |   |                               | 37,047    |   |                               |   | 39,576    |                                     |   |   | 5,228                             |   |   |   | 34,348 |   |
|                    Restructuring and other charges                                                           |   |                               | 16,483    |   |                               |   | 3,378     |                                     |   |   | 3,700                             |   |   |   | (322 | ) |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                    Operating income                                                                          |   |                               | 2,885     |   |                               |   | 49,410    |                                     |   |   | 23,269                            |   |   |   | 26,141 |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                    Interest income                                                                           |   |                               | (1,333    | )      |                               |   | (524      | )                                        |   |   | (501                              | )      |   |   | (23 | ) |
|                    Interest expense                                                                          |   |                               | 85,355    |   |                               |   | 27,964    |                                     |   |   | 19,550                            |   |   |   | 8,414 |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                    Income (loss) before income taxes                                                         |   |                               | (81,137   | )      |                               |   | 21,970    |                                     |   |   | 4,220                             |   |   |   | 17,750 |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                    Income tax expense                                                                        |   |                               | -         |   |                               |   | 7,068     |                                     |   |   | 75                                |   |   |   | 6,993 |   |
|                                                                                                              |   |                               |      |   |                               |   |      |                                     |   |   |                              |   |   |   |   |   |
|                    Net income (loss)                                                                         |   | $                                  | (81,137   | )      |                               | $      | 14,902    |                                     |   | $      | 4,145                             |   |   | $ | 10,757 |   |

*Net      Sales*

----

*Cost      of sales*

*Selling,      general and administrative*

*Interest      expense*

*Restructuring      and other charges*

*Income      tax expense*

**Seasonality**

----

**Liquidity      and Capital Resources**

*Net      cash flows from operating activities. *

*Net      cash flows from investing activities. *

*Net      cash flows from financing activities. *

| ·   | a                $285 million term loan facility, with a maturity of seven years,                which was                fully drawn on August 1, 2006; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a                $200 million revolving credit facility with a maturity of nine                years.  No amounts were outstanding as of September 30,                2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Critical      Accounting Policies**

*Accounting for Contingencies*
*Accounting for the      Impairment or Disposal of Long-Lived Assets*
*Goodwill and Other Intangible Assets*
*Employers’Accounting for Pensions*
*Employers’ Accounting for      Postretirement Benefits Other Than Pensions*
*Employers’ Disclosures About Pension and Other      Postretirement Benefits*
*Employers’ Accounting      for Defined Benefit Pension and Other Postretirement Plans*

----

*Impairment      of long-lived assets and goodwill*

*Goodwill and Other Intangible      Assets*

*Pension      and Postretirement Benefit Obligations. *

*Contingent      liabilities.   *

----

**Accounting      changes**

***Fair      Value Measurements***
*Fair Value Measurements*

***Fair      Value Option for Financial Assets and Financial Liabilities***
*Fair Value Option for Financial      Assets and Financial Liabilities—including an amendment of FASB Statement No.      115, *

**Forward-Looking      and Cautionary Statements**

**Covenant      Compliance**

----

----

|                                                      |   | **Successor**                          |   |   |                                   |   |   |                               |   |   |                               |   |
|-----------------------------------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|--------|--------|------------------------------------|--------|--------|------------------------------------|--------|
|                                                      |   | **&                  Predecessor** |   |   | **Successor**                          |   |   |                               |   |   |                               |   |
|                                                      |   | **Combined**                           |   |   | **&                  Predecessor** |   |   | **Successor**                      |   |   | **Successor**                      |   |
|                                                      |   | **Nine                  Months**       |   |   | **Combined**                           |   |   | **Nine                  Months**   |   |   | **Twelve                  Months** |   |
|                                                      |   | **Ended**                              |   |   | **Year                  Ended**        |   |   | **Ended**                          |   |   | **Ended**                          |   |
|                                                      |   | **September                  30,**     |   |   | **December                  31,**      |   |   | **September                  30,** |   |   | **September                  30,** |   |
| (In                  millions of U.S. dollars)            |   | **2006**                               |   |   | **2006**                               |   |   | **2007**                           |   |   | **2007**                           |   |
|                                                      |   |                                   |   |   |                                   |   |   |                               |   |   |                               |   |
| Net                  income (loss)                        |   | $                                      | 14.9   |   |                                   | $      | 8.9    |                               |   | $      | (81.1                              | )      |   | $ | (87.1 | ) |
| Interest                  expense, net                    |   |                                   | 27.4   |   |                                   |   | 55.3   |                               |   |   | 84.0                               |   |   |   | 111.9 |   |
| Income                  taxes                             |   |                                   | 7.0    |   |                                   |   | 7.0    |                               |   |   | -                                  |   |   |   | - |   |
| Depreciation                  and amortization            |   |                                   | 91.4   |   |                                   |   | 121.0  |                               |   |   | 90.6                               |   |   |   | 120.2 |   |
| EBITDA                                                    |   | $                                      | 140.7  |   |                                   | $      | 192.2  |                               |   | $      | 93.5                               |   |   | $ | 145.0 |   |
| Adjustments                  to EBITDA                    |   |                                   |   |   |                                   |   |   |                               |   |   |                               |   |   |   |   |   |
| Lease                  not assumed (1)                    |   |                                   | 5.8    |   |                                   |   | 5.8    |                               |   |   | -                                  |   |   |   | - |   |
| Change                  in machine use, net (2)           |   |                                   | 2.8    |   |                                   |   | 2.8    |                               |   |   | -                                  |   |   |   | - |   |
| Restructuring,                  severance and other (3)   |   |                                   | 3.3    |   |                                   |   | 9.8    |                               |   |   | 16.5                               |   |   |   | 23.0 |   |
| Non-cash                  compensation/benefits (4)       |   |                                   | 5.0    |   |                                   |   | 5.4    |                               |   |   | 0.5                                |   |   |   | 0.9 |   |
| Inventory                  fair value (5)                 |   |                                   | 4.6    |   |                                   |   | 5.9    |                               |   |   | -                                  |   |   |   | 1.3 |   |
| Other                  items, net (6)                     |   |                                   | 4.0    |   |                                   |   | (0.1   | )                                  |   |   | 6.9                                |   |   |   | 2.8 |   |
| Adjusted                  EBITDA                          |   | $                                      | 166.2  |   |                                   | $      | 221.8  |                               |   | $      | 117.4                              |   |   | $ | 173.0 |   |
|                                                      |   |                                   |   |   |                                   |   |   |                               |   |   |                               |   |   |   |   |   |
| Pro                  forma cash interest expense, net (7) |   |                                   |   |   |                                   |   |   |                               |   |   |                               |   |   | $ | 107.0 |   |
| Adjusted                  EBITDA to cash interest expense |   |                                   |   |   |                                   |   |   |                               |   |   |                               |   |   |   | 1.6 |   |

| (1)    | Reflects                    the elimination of the historical rent expense incurred on the                    Sartell                    property lease that was not assumed by us.                                                                                                                                                                                                                                                                                                                                                                     |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)    | Represents                    the elimination or addition of expected earnings as a result                    of changes in                    the use of two of our paper machines at the Jay mill prior to the                    Transactions.                                                                                                                                                                                                                                                                                                            |
| (3)    | Includes                    restructuring and severance as per our financial                    statements.  Restructuring includes transition and other                    non-recurring costs                    associated with the acquisition and carve out.                                                                                                                                                                                                                                                                                       |
| (4)    | Represents                    amortization of certain one-time benefit payments and non-cash                    benefit                    payments.  Also includes the elimination of                    historical non-cash stock compensation costs previously incurred                    by us                    under International Paper's compensation plan.                                                                                                                                                                                   |
| (5)    | Represents                    the fair value of inventory adjustment related to purchase                    accounting.                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (6)    | Represents                    earnings adjustments for exceptional levels of bad debt expense,                    legal and                    consulting fees, and other miscellaneous non-recurring                    items, including adjustments for incremental estimated costs                    for                    activities previously part of the corporate allocation as                    well as other incremental costs we anticipated incurring on a                    stand-alone                    basis subsequent to the Transactions |
| (7)    | Presented                    pro forma for the Transactions.  Cash interest expense                    represents gross interest expense related to the debt, excluding                    amortization of debt issuance costs.                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| NOTE:  | To                    construct financials for the twelve months ended September 30,                    2007,                    amounts have been calculated by subtracting the data for                    the nine months ended September 30, 2006, from the data for the                    year ended                    December 31, 2006, and then adding the nine months ended September                    30,                    2007.                                                                                                                  |

----

**ITEM 3.   QUANTITATIVE      AND QUALITATIVE      DISCLOSURES ABOUT MARKET RISK**

***Paper      prices***

***Interest      Rate Risk***

***Commodity      Price Risk***

----

**ITEM      4T.  CONTROLS AND      PROCEDURES**

----

**PART      II.  OTHER INFORMATION**

**ITEM      1.   LEGAL PROCEEDINGS**

**ITEM      1A.  RISK FACTORS**

**ITEM      2.   UNREGISTERED SALES OF EQUITY SECURITIES      AND USE OF PROCEEDS**

**ITEM      3.   DEFAULTS UPON SENIOR      SECURITIES**

**ITEM      4.   SUBMISSION OF MATTERS TO A VOTE OF      SECURITY HOLDERS**

**ITEM      5.   OTHER      INFORMATION**

**ITEM 6.  EXHIBITS**

| Exhibit              31.1 |   | Certification              of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)              under the Securities Exchange Act of 1934, as adopted |
|---------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit              31.2 |   | Certification              of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)              under the Securities Exchange Act of 1934, as adopted |
| Exhibit              32.1 |   | Certification              of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,              as              adopted                                     |
| Exhibit              32.2 |   | Certification              of Principal Financial Officer pursuant to 18 U.S.C. Section 1350,              as              adopted                                     |

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**SIGNATURES**

| Date:  November                13, 2007 |   |                                                                                                                                                                  |   |                                                                                                                                                |
|---------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|                                              |   | VERSO                PAPER HOLDINGS LLC                   (Registrant) |
|                                              |   |                                                                                                                                                                  |
|                                              |   | By:                                                                                                                                                                   |   | /s/                  Michael A. Jackson                                                                                                             |
|                                              |   |                                                                                                                                                                  |   | **Michael                A. Jackson****President                and Chief Executive Officer**** (Principal                Executive Officer)** |

|   |   |   |   |                                                                                                                                                                                 |
|--------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                 |
|   |   |   |
|   |   | By:    |   | /s/                  Robert P. Mundy                                                                                                                                                 |
|   |   |   |   | **Robert                P. Mundy****Senior                Vice President and Chief Financial Officer****(Principal                Financial and Accounting                Officer)** |

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**EXHIBIT      INDEX**

| Exhibit                31.1 |   | Certification                of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)                under the Securities Exchange Act of 1934, as adopted |
|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit                31.2 |   | Certification                of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)                under the Securities Exchange Act of 1934, as adopted |
| Exhibit                32.1 |   | Certification                of Principal Executive Officer pursuant to 18 U.S.C. Section 1350,                as                adopted                                   |
| Exhibit                32.2 |   | Certification                of Principal Financial Officer pursuant to 18 U.S.C. Section 1350,                as                adopted                                   |