Textbook publisher and education company Cengage Learning announced that it has sought Chapter 11 bankruptcy protection as part of a pre-arranged restructuring plan that will enable it to reduce its $5.8 billion in outstanding debt.
The company filed for protection in the U.S. Bankruptcy Court in Brooklyn, New York. Like many other textbook publishers, it has struggled to remain profitable as more consumers move toward online publishing materials and resources. Cengage said it has entered into a restructuring agreement with lenders – including JPMorgan Chase & Co , KKR Asset Management, BlackRock Inc., and Oaktree Capital Management – who hold $2 billion of first-lien debt, Reuters reports.
Photo courtesy of Jonas Jacobsson (Unsplash.com)
Overall, the restructuring is designed to help Cengage shed roughly $4 billion in debt from its balance sheets. In addition, Cengage noted that it has substantial cash balances and expects to generate positive cash flow, and it therefore does not intend to obtain debtor-in-possession (DIP) financing. Further, the company’s non-U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate without interruption.
“The decisive actions we are taking today will reduce our debt and improve our capital structure to support our long-term business strategy of transitioning from traditional print models to digital educational and research materials,” said Michael Hansen, Cengage Learning’s chief executive.
Cengage Learning, formerly Thompson Learning, was acquired in a 2007 leveraged buyout by private equity firm Apax Partners and Omers Capital Partners. The company later purchased the college publishing division of Houghton Mifflin Harcourt Publishing for $750 million, and in 2011, acquired National Geographic’s digital and print school publishing unit, the New York Times reports.
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
