Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
They just don’t make bankruptcies like they used to. In the good old days they took years if not decades to resolve, with thousands of shareholders ruined, employees turned out into the cold and customers royally discommoded. But today it takes just a bit longer than a Las Vegas wedding or Mexican divorce, and it’s all pretty bloodless.
At least it seems that way when you look at Houghton Mifflin Harcourt, which filed for bankruptcy May 21; a month later its Plan of Reorganization was confirmed by the US Bankruptcy Court and on June 22 it was business as usual, except the company was a few billion dollars of debt lighter.
Perhaps the procedure was like making Chinese food. It takes an hour to chop but a mere minute or two to cook. In HMH’s case the suffering has been going on since March 2009 when we reported that an investment syndicate had incurred $7 billion in debt to leverage the acquisition of a major piece of Harcourt. It just happened to come at a time when the world spun off into recession leaving a lot of smart people holding overleveraged properties they could not dump. Debt service alone was costing the group $500 million annually.
It’s taken all this time for the chickens to come home to roost. When they did, a short sharp shock finished the job. The prepackaged bankruptcy raced through the court like Danny Kaye in the knighthood ceremony in The Court Jester.
Here’s the detailed story: Houghton Mifflin Harcourt emerges from bankruptcy