Cenveo, one of the largest U.S. printing and envelope companies, filed bankruptcy Friday, succumbing to a debt burden of more than $1 billion and sharply lower sales amid the shift from paper products to digital technology.

Cenveo’s Chapter 11 petition came with an agreement with creditors that would cut its debt by about $700 million. It has also lined up secured $290 million of financing to support operations through the bankruptcy proceedings.

According to court papers, the company has annual debt payments of about $99.4 million and its “funded debt obligations are unsustainable.”

“The plan we are pursuing today will significantly reduce our debt and improve our capital structure to support our long-term business strategy,” CEO Robert G. Burton Sr. said in a news release, adding he was confident that Cenveo “will emerge from this process with a stronger balance sheet to support its profitable growth in the years ahead.”

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In addition to producing 50 billion envelopes annually for customers such as JPMorgan Chase and American Express, Cenveo prints comic books and prescription labels for pharmacies and has more than 30 U.S. operating plants.

“Since 2005, we have transformed Cenveo from its print-focused roots into the largest envelope manufacturer and one of the largest labels manufacturers in North America,” Burton noted.

But Ayman Zameli, executive vice president of corporate strategy and capital markets, said in the court papers that Conveo has been hit by consumers’ increasing use of the internet and other electronic media to purchase goods and services, pay bills, and obtain electronic versions of printed materials.

Cenveo’s cost-cutting initiatives, Zameli said, have “resulted in a more streamlined operating model and focused portfolio” but the company has “continued to be adversely impacted by its significant debt burden.”

Under the bankruptcy plan, first-lien lenders will receive nearly all the equity in the reorganized company when it emerges from Chapter 11, along with new debt, in return for reducing what they are owed. Cenveo plans to cancel its stock and holders of the company’s unsecured notes will receive around 2.5% of what they are owed.

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