A national search is underway to replace the chief executive of bankrupt papermaker Verso Corp.

The Memphis-based paper company announced Monday that David J. Paterson, CEO and president, will step down from day-to-day management and become chairman of the board once the company emerges from Chapter 11 bankruptcy reorganization proceedings.

The company, which employs roughly 500 people at its Androscoggin mill in Jay, filed for bankruptcy in January. Like many other U.S. manufacturers of paper, Verso was hit by declining demand for its coated papers and shifting global markets. It expects to emerge from bankruptcy next month, according to filings with the U.S. Securities and Exchange Commission.

“Dave Paterson has been a stalwart as Verso’s president and chief executive officer over the past four years,” Scott Kleinman, Verso’s board chair, said in a news release. “During this period of unprecedented upheaval in the printing and writing papers industry, Dave has provided insightful vision and steady, reliable leadership for Verso. His contributions in managing a business with constrained liquidity have been particularly valuable and appreciated as Verso has dealt head-on with the financial challenges of our industry and company. Due in no small measure to Dave’s substantial efforts, Verso now is poised to emerge from a fully consensual Chapter 11 reorganization as a stronger competitor with a financially sustainable capital structure.”

Paterson’s total compensation in 2015 was $2.57 million, according to its annual SEC filing.

The company filed for bankruptcy in Delaware on Jan. 26 to eliminate $2.4 billion of debt. To stem the loss of revenue, it sold off its unprofitable Bucksport mill in 2014, eliminating 500 jobs. The move was part of a complicated $1.4 billion deal that involved the acquisition and then sale of the former NewPage mill in Rumford in January of last year. That mill is now owned by Canada-based Catalyst Paper.

At the conclusion of the NewPage deal, Verso had about $3.5 billion in annual sales and about 5,800 employees in eight mills across six states. In its bankruptcy filing, the company reported gross revenues of about $2.4 billion for the first three quarters of 2015.

In a separate SEC filing Monday, the company announced it was raising another $575 million to help it pay transaction costs associated with the bankruptcy. As a result of the reorganization, the company expects to have a stronger credit profile and increased financial flexibility. New common stock will be issued to creditors that were owed money by Verso and NewPage before the bankruptcy.

The company also said in its SEC filing that it will seek a product mix of more profitable grades of paper, such as specialty grades, post-bankruptcy. Verso, the largest North American coated paper producer, did not specify in the filing which mills would be reconfigured, if any, to boost capacity of specialty paper.

The Androscoggin mill in Jay produced about 71,800 tons of specialty paper in 2015, roughly 12 percent of the mill’s total production volume of 598,000 tons, according to the filing. By comparison, the mill produced about 293,000 tons of coated groundwood paper, or 49 percent of total production volume. Coated paper is the glossy paper used in catalogs and magazines.

One of the Androscoggin mill’s three coated paper machines and a pulp dryer were taken offline in late 2015, resulting in the loss of about 300 jobs, or roughly one-third of its workforce at the time.

When it announced the layoffs in August, the company said declining demand for coated paper, coupled with high energy costs and property taxes, prompted its decision.

Verso’s shutdown of the pulp dryer and coated paper machine reduced its annual production capacity by 150,000 tons of coated paper and 100,000 tons of dried market pulp.

The Androscoggin Mill opened in 1965 with five paper machines. One machine has since been converted to a pulp dryer and is now offline. The mill has three coated paper machines, one of which is now offline, and produces specialty grades of paper on the other machine.