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Hitch in Houghton's Bankruptcy

Posted on in Bankruptcy

One day after approving the a prepackaged Chapter 11 plan filed by educational publishing company Houghton Mifflin Harcourt Publishing Co., New York bankruptcy judge Robert E. Gerber ruled on June 22 that the petition was improperly filed in New York. The U.S. Trustee, bankruptcy watchdog for the Justice Department, had filed a motion to move the case to Boston on May 30, saying there was no basis for a bankruptcy in New York.

The judge reached his decision because none of Houghton's companies is incorporated in New York. Furthermore, the publishing company holds no principle assets or place of business in Manhattan, where the petition was filed. Gerber expressed misgivings regarding the move, however stating that New York was the venue Mifflin's creditors requested.

The reorganization was to be completed in one month, and Mifflin had already begun implementing the plan when Roberts reached his decision to move the petition to the U.S. Bankruptcy Court in Boston, where Houghton Mifflin is based. To avoid unnecessarily harming the company or its creditors, Gerber will allow the case to remain in New York until the plan is fully implement, or in three weeks, whichever comes first. No further proceedings will be held in New York, and the bankruptcy judge in Boston will rule on professionals' fee requests.

Houghton Mifflin Harcourt Publishing listed revenue in 2011 of around $1.3 billion. The Chapter 11 petition lists assets of $2.68 billion and debt totally $3.54 billion. Houghton Mifflin is a major publisher of educational textbooks, software, video and reference works, as well as fiction and non-fiction books.

If you or your company is considering filing for bankruptcy, it is important that you speak with an experienced bankruptcy attorney. Do not delay in seeking our expert help in setting you on the path to financial recovery.

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