Canadian pulp producer Mercer International is laying the groundwork for a potential Chapter 11 bankruptcy filing, according to people familiar with the matter. Mercer, which has struggled with rising fiber and energy costs as well as persistent cash burn, could seek court protection in the coming weeks. The company would likely file in Texas, though no final decision has been made and plans could still change, they added. Creditors are expected to take control of the company if it files for bankruptcy, the people said. Opportunistic credit investor Redwood Capital Management had been acquiring Mercer’s distressed debt, becoming one of its largest creditors. The company and Redwood did not respond to requests for comment, while a representative for company adviser Houlihan Lokey declined to comment. Mercer had about US$1.3 billion of long-term debt as of June 30. Its shares closed Wednesday at about 21 cents, down from US$1.98 at the end of 2025. [END]