Also included in yesterday’s voluntary bankruptcy filing from Houghton Mifflin Harcourt was the disclosure of some basic financial numbers–and problems. For 2011, the company had sales of approximately $1.295 billion and EBITDA of $238 million, which underscores why a debt load of over $3 billion was unsustainable (with interest payments exceeding cash generated). The only solution, as the filing points out, was “a restructuring to completely delever the debtor’s balance sheet.” In looking for causes/excuses, the company says that “the recession decreases in state spending as well as significant purchase deferrals in key states and territories resulted in material reductions […]
Finance
As Expected, HMH Files For Pre-Packaged Chapter 11 Bankruptcy
Houghton Mifflin Harcourt filed for chapter 11 bankruptcy in New York’s Southern District Court Monday morning, listing debt of more than $1 billion each in the initial court filing. As previously reported, HMH is going through a pre-packaged bankruptcy to eliminate more than $3 billion in debt left over from the initial $7 billion accrued when Riverdeep merged Houghton Mifflin and Harcourt together several years ago, and hopes to complete its financial restructuring by the end of June. Court documents filed by HMH’s counsel Paul, Weiss, Rifkind and Garrison lists assets of “between $10 million and $50 million,” as well […]
Burkle to Reallocate His Barnes & Noble Stock
Barnes & Noble’s stock was having a rough day in Thursday morning trading and then briefly plunged in the afternoon following an SEC filing by large shareholder Ron Burkle. What he reported to the SEC is that two of the entities he controls–Yucaipa American Alliance Fund II and Yucaipa American Alliance (Parallel) Fund II–are going to “distribute in-kind” their shares to the funds’ owners. (It’s difficult to tell from Burkle’s filing how his 19.74 percent block of Barnes & Noble stock is spread among multiple entities, each of which is credited with substantial interest in same pool of shares.) The market’s […]
Legal Briefs: 17 More States Join Amended eBook Pricing Complaint; ‘Godfather’ Sequel Proceeds in Escrow; and More
Late last week 16 more states, as well as the District of Columbia, joined the amended ebook pricing complaint against Apple and the ‘Agency Five’ publishers, bringing the number of states involved in the lawsuit to 32. Texas and Connecticut initially filed the complaint at the same time as the DOJ; among the new plaintiffs are Virginia, Indiana, New York, and Wisconsin. Page One Bookstore in Albuquerque, NM, which filed for Chapter 11 bankruptcy in February 2011, said it expects final approval of a reorganization plan to move forward as a going concern “shortly,” according to the Albuquerque Journal. Owner […]
Houghton Plans Pre-Packaged Bankruptcy and Restructuring to Eliminate Over $3 Billion In Debt
After months of reports that Houghton Mifflin Harcourt was preparing a second major restructuring of its debt load (and multiple warnings from rating services), the company announced Friday morning they have a “high level of support” from their lenders and bondholders for a pre-packaged bankruptcy and financial restructuring. The proposal would eliminate their $3.1 billion debt load, and save the company $250 million a year in debt service. Under the plan, current bondholders and lending banks would trade their loans for 100 percent of the equity in the reorganized company. As is generally the case in such restructuring’s, existing equity […]
Books-A-Million Announces Formation of Special Board Committee for Buyout As Shareholder Sues
Books-A-Million formally announced the creation of a special committee of independent directors that will evaluate and make a recommendation regarding the Anderson family’s bid to take the company private. The committee, comprising Albert C. Johnson and J. Barry Mason, has retained King & Spalding as its legal counsel and is in the process of retaining financial advisors. In the same statement, BAMM’s board of directors again cautioned shareholders and other interested parties that the board “has only recently received the proposal and no decisions have been made…. There can be no assurance that any definitive offer will be made or […]