Publishing firm files for bankruptcy
THE education publishing house built up by Corkman Barry O'Callaghan filed for bankruptcy protection in the US yesterday, crippled with billions of dollars in debt.
Houghton Mifflin Harcourt (HMH) filed for Chapter 11 bankruptcy, as part of a pre-packaged deal that will wipe out some $3.1bn (€2.4bn) worth of debt and convert it into equity in the business.
The restructuring is the firm's second in two years and will wipe out the equity that senior lenders took in an arrangement from February 2010, which cut debt from $7bn to about $3bn.
That first restructuring wiped out a group of Irish investors, put together by Davy Stockbrokers, who had put around €170m behind Mr O'Callaghan as he went on an acquisition splurge.
Mr O'Callaghan, who had been chief executive of the Irish firm Riverdeep since the 1990s, did a reverse takeover of Houghton Mifflin, which he bought from several private equity firms in a $3.4bn deal in 2006, much of which was financed with debt. He then bought Harcourt the following year.
HMH employs some 200 people in Dublin -- but there are no job losses expected as part of the deal.