Houghton Mifflin Harcourt Publishing Company, publisher of well-known works by authors J.R.R Tolkien and Mark Twain, as well as Curious George and Lord of the Rings, filed for Chapter 11 bankruptcy protection recently in New York as they work to reduce outstanding debt valued at more than $3 billion.
According to the San Francisco Chronicle, the Boston, Massachusetts based company has assets listed close to $2.70 billion but has debt over $3.50 billion. More than 20 affiliates of the company also joined in on the bankruptcy filing. According to William Bayers, general counsel for the company, the financial crisis of the country and other areas around the world has had a negative impact on the company's productivity. The company depends on local and state funding when it produces content for the schoolbook market.
The private publishing company claims their bankruptcy filing is supported by the majority of their stakeholders and hope the filing will help strengthen the company financially in the future. Adding to their debt woes, in 2007 the publisher acquired Harcourt Education for $4 billion. This acquisition made the company a top seller for grade school books but when the economy took a turn, it hurt public school funding along with textbook sales.
The company expects the bankruptcy proceedings to be completed by the end of June and it will continue daily operations. Along with cutbacks from the government, many traditional publishers such as Houghton Mifflin Harcourt Publishing are facing pressure competing with eBook technology and books being published online.