The move is backed by the company’s creditors and will allow the firm restructure and convert debt into ownership stakes for its creditors. According to Reuters, the firm has some US$3.1 billion in debt that it was struggling to pay back.
Houghton Mifflin (as it is often shortened to) competes mainly in the education-driven market for textbooks. The company also publishes some fiction, including, notably, The Lord of the Rings through Mariner Books.
While all of the major publishers are struggling to deal with a changing industry that includes digital distribution, ereaders and tablets, and the challenges of Amazon’s fierce competition at the retail level, Houghton Mifflin Harcourt faces additional challenges specific to education.
Local and state governments have slashed education funding in the wake of the economic crisis that began in 2008, and smaller budgets mean fewer textbooks being purchased.
Houghton Mifflin was not a part of the antitrust case being pursued against Apple and five of the the so-called Big 6 largest publishers in the U.S. Three of those publishers have settled, while Apple and two more are fighting it out in court.
As noted above, however, Houghton Mifflin was an inaugural partner in Apple’s iBooks 2 digital textbook initiative.
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