The company, which employs close to 200 and is best known for its Kromekote and Knightkote coated paper brands, has already reached an agreement to sell a new 36-megawatt power generating plant, SmartPower, it built to run its paper mill.

Ironically, it is that new investment in green power technology - along with some new environmental rules regarding the old steam boilers that had been running its mill - that ultimately put the company in its current no-win situation. Smart Papers essentially invested in its business just when printing and paper demand was being hit hardest by the global recession.

"The electronic nature of communications and the economy has truly impacted the high-end paper business," CEO Tim Needham told PrintWeek. "People have cut back on their high-end print collateral."

That recession put the company in a squeeze, so it began looking to find a buyer. But that effort was compounded by not only the massive $70m investment a new power generation facility - which used biomass, including wood chips, as fuel - but also by new environmental regulations.

"People have been interested in acquiring the company and its brands, but we have this great unknown: the EPA (Environmental Protection Agency) Boiler MACT (Maximum Achievable Control Technology) rule, which reduce pollutants caused by industrial boilers," Needham said. "And that has caused us great problems in doing a straight sale.'

Smart Papers in its current form was begun by Needham back in 2001 when he worked with bankers to purchase the Champion Paper Mill. Since then the company has seen its share of financial ups and downs, including a bankruptcy and the sale of its uncoated paper production facility.

Paul Simpson, Smart Papers EVP of sales and marketing put part of the blame on the "rapid expansion of low-priced Asian coated paper manufacturing [and] the increased costs of raw materials and chemicals".

Needham conceded that US paper manufacturers, including Smart Papers, have been getting squeezed by cheaper imports from China despite US anti-dumping duties. But he said that up until recently the paper side of the business made money on a consistent basis. "The problem is we invested $70m in a power company, and based on the current boiler configuration. I'm not sure that's going to exist," he added.

Needham added they've notified all their employees at their Hamilton, Ohio paper facility and are looking to do an orderly wind down. As part of that process, the company has entered into a joint venture with Farmington Hill, Michigan-based Hilco Industrial to try to sell off either the paper side of the business or the new power plant.

Needham added he expected the process to take about three to six months, adding "We're still accepting orders and running the paper business in case people are interested in buying the assets or the IP or the brand names Kromekote and Knightkote."