US-based manufacturer of paperboard and paper-based packaging, Smurfit-Stone Container Corporation, has told its lenders that plunging sales and a cash shortage could lead it to file for Chapter 11, reported The Wall Street Journal.

The company would have hired legal counsel with bankruptcy expertise and would be seeking to arrange post-bankruptcy financing.

"North American packaging demand has deteriorated rapidly in the past several weeks and containerboard and pulp export markets have weakened even more dramatically," the company said last month, expecting fourth-quarter profit to come in "significantly lower" compared with the third quarter.