MANHATTAN (CN) – Houghton-Mifflin Harcourt Publishers, a major textbook company, filed for Chapter 11 bankruptcy Monday, listing less than $50 million in assets and more than $3 billion in debts.
The company said 2 weeks ago that it had cut a deal with creditors to restructure about $3.1 billion in debt in return for stakes in the publishing giant, which Irish tycoon Barry O’Callaghan formed by buying Houghton Mifflin in 2006 and Harcourt in 2007.
O’Callaghan borrowed heavily to finance his purchases, and when the worldwide recession hit, and U.S. school districts slashed budgets nationwide, the textbook company took a beating.
Houghton said on May 11, when it announced its deal with creditors, that more than 70 percent of them would go along with its plan. Bloomberg News reported that the company has about $2.85 million of loans coming due in the next 2 years.
Houghton said company operations will continue as normal.