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3,338 Views 8 Replies Last post: Jun 4, 2012 12:36 PM by walton RSS
Level 1 113 posts since
Feb 24, 2012
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Jun 4, 2012 5:12 AM

HOUGHTON Publishing files for bankrupcty

Stunning!   Major publisher goes bankrupt!     Wow..that is great for our self publsihing industry. Wahoo!!

 

Sad...but great!  

 

http://www.businessweek.com/news/2012-05-21/houghton-mifflin-harcourt-publishing-files-for-bankruptcy

Level 5 9,285 posts since
Aug 22, 2008
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1. Jun 4, 2012 7:00 AM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

Netnurse83 wrote:

Major publisher goes bankrupt! Wow..that is great for our self publsihing industry.

How so?

Level 2 79 posts since
Oct 7, 2011
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2. Jun 4, 2012 7:14 AM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

Bankruptcy (for either good or ill) doesn't really mean a whole lot other than they have more debt than they can pay off in the foreseeable future. It could be because they're having a cash-flow crunch, they're poorly managed, over staffed, a bad economy. . .

 

It doesn't necessarily mean that they're not selling books or that they won't continue to sell books. They'll stay in business and continue to make lots of money. What it does mean is that a court-appointed trustee will decide which creditors get paid and when. So, unless you're one of Houghton Mifflin Harcourt's creditor's, this doesn't really amount to a hill of beans.

 

Andrew S.

Civium Press

Level 3 576 posts since
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3. Jun 4, 2012 7:34 AM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

A different article in the NY Times mentions that the firm has been saddled with a heavy debt burden since 2006--2007, from something that sounds very much like what used to be called a "leveraged buyout" in the last century.  LBOs very often had the same result back then.

 

Their plans are to sell stock to raise the money to pay off the debt ("convert debt to equity").

 

http://mediadecoder.blogs.nytimes.com/2012/05/11/houghton-mifflin-harcourt-enters-bankruptcy-process/

Level 0 11 posts since
May 23, 2012
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4. Jun 4, 2012 8:24 AM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

A great many things go on behind the scenes in the business world that Mr. Average never knows about. Some of it would blow your socks off. Trust only the things affecting you personally and let the rest pass you by.

 

David.

Level 2 79 posts since
Oct 7, 2011
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6. Jun 4, 2012 11:16 AM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

The thing is, however, that they didn't fold. Chapter 11 bankruptcy isn't folding; it's reorganizing and setting priorities.

Level 5 9,285 posts since
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7. Jun 4, 2012 12:23 PM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

Thanks for explaining your position.  I guess I haven't read the business analysis that explains how HMH's declining revenues are a result of customers buying independently published books instead of theirs.  I thought it had more to do with the recession and unemployment pulling down local tax bases, which in turn has caused school districts and other institutional buyers to defer book purchases because they don't have any funding for them.  That didn't seem like such a good thing to me, but I guess if the institutions that can't afford to buy books from HMH or any of its major competitors are still finding the money to buy from us, then maybe it is.

 

For what it's worth, a 2009 Reuters survey ranked HMH as one of the ten worst places to work in the U.S., so that's probably not helping the operation either.

Level 5 14,279 posts since
Sep 5, 2009
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8. Jun 4, 2012 12:36 PM in response to: Netnurse83
Re: HOUGHTON Publishing files for bankrupcty

Personally, I don't applaud the possible demise of any traditional publisher.  They offer a number of things that small publishers cannot.  Aside from marketing and distribution (which could certainly be poor), these companies generally offer significantly better editorial resources, legal review (albeit often on the conservative side), and media perils coverage.

 

Walton

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