Pat Moore, Chairman and CEO of Smurfit-Stone Container Corporation, presides over the opening bell at the Nasdaq MarketSite, Times Square, New York, October 11, 2007

Smurfit-Stone Container, North America's largest paper packaging company, is reported to be considering filing for bankruptcy amid weakening sales and a cash crunch.

The company, which had sales of $7.4 in 2007, was founded in November 1998 as a result of the merger between Jefferson Smurfit Corporation (JSC) and Stone Container. JSC was spun off from the Irish packaging group Jefferson Smurfit Plc.

The Wall Street Journal reports today that Smurfit-Stone has hired bankruptcy counsel and financial advisers in an effort to line up about $750 million in debtor-in-possession financing, the people familiar with the matter said. Such lending allows a company in bankruptcy proceedings to maintain control of its operations.

A Chapter 11 filing for protection from creditors could come within two weeks, once the company secures the financing, a type of lending that has been harder and more expensive to land in recent months. It remains possible the company will avoid a bankruptcy filing.

The Journal says like many other companies in financial distress, Smurfit-Stone is heavily leveraged. It borrowed money for a merger and capital spending that have left it little room to navigate the recession. The company has a $7.3 million interest payment due later this week, but it was unclear if 40-year-old Smurfit-Stone was going to make the payment, the people said.

The company has about $3.5 billion in outstanding debt and roughly $7.5 billion in annual sales.It has about $316 million in debt payments due this year. The company also needs to refinance a $800 million revolving credit line due in November.

Smurfit-Stone's stock price has fallen from around $9 a year ago to 36 cents Wednesday.

Jefferson Smurfit, the son of a shipyard worker, was born in Sunderland, in northeast England, in 1909. In 1934, Smurfit opened a tailoring business and soon became involved in a box-making factory in Dublin. When the company was first floated on the Irish Stock Exchange in 1964, its market value was the equivalent of just €1.5m.

Jefferson Smurfit's eldest son Michael, was responsible for building the company into a multi-billion euro world leader in packaging and with Tony O'Reilly, was the international face of Irish business in the 1970's and '80's..

"To this day I cannot believe our competitors allowed us to get to this position," Michael Smurfit told the London Independent in 2006. "In their shoes, I'd have taken pre-emptive steps to halt our growth."

The non-North American operations of Smurfit were sold to private equity firm Madison Dearborn Partners for $3.5bn in 2002.

Jefferson Smurfit changed its name to Smurfit Kappa in 2005, after acquiring Dutch rival Kappa Packaging.

Smurfit Kappa became a public company in 2007.