Roundup: As Expected, Cengage Learning Files For Bankruptcy Protection

Last week we shared that the Wall St. Journal report that said Cengage Learning (as in Gale/Cengage) was likely to file for bankruptcy protection as early as this week.
Well, the WSJ was correct and Cengage Learning filed for bankruptcy earlier today.

From Cengage

Cengage Learning fully expects to maintain normal business operations throughout the restructuring process, with no expected disruptions to our relationships with our customers, authors, employees, business partners and vendors.

Media Coverage

From Reuters:

Cengage Learning Inc, a large U.S. textbook publisher, on Tuesday filed for bankruptcy protection, as part of a prearranged restructuring it said will help it eliminate more than $4 billion of debt.
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Cengage said it won support from a group of first-lien lenders for the restructuring, which would eliminate more than two-thirds of the Stamford, Connecticut-based company’s roughly $5.8 billion of debt. Non-U.S. units are not part of the bankruptcy case.

From Bloomberg:

“Our balance sheet is absolutely not fit for purpose, there is too much debt,” Chief Executive Officer Michael Hansen said today in a phone interview. “After we come out of this restructuring, we feel we’ll be in a very good position, with a very sound balance sheet, and a lot of room to continue to invest in the business.”
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Cengage, with headquarters in Stamford, Connecticut, reported an 18 percent drop in sales for the six months ended Dec. 31.
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In the past, too much investment was directed to print at the expense of digital, Hansen said. Under new management, Cengage is focused “squarely on digital” and faculty and student users.

Bankruptcy Info from Gale/Cengage

• Company Announcement/News Release (PDF)

Cengage Learning plans to make timely paymentto vendors for goods and services provided to the Company during its restructuring in the normal course of business. It is anticipated that employees will continue to receive their usual pay and health and welfare benefits.

• Letter From to Gale Leadership to Gale Customers (PDF)

• Letter From CEO Michael Hansen to Cengage Learning Customers (PDF)

Primary Documents–Court Filings

Note: Filing #1 includes list of Top 30 Creditors Holding Largest Unsecured Claims

Cengage Learning Bankruptcy Filing #1

Cengage Learning Bankruptcy Filing #2 by LJ’s infoDOCKET

See Also

• Cengage Learning Bankruptcy Info Web Site

• Cengage May Declare Bankruptcy (by Meredith Schwartz, LJ)
  May 14, 2013

Filed under: Companies (Publishers/Vendors), Gale, Interviews, Libraries, Management and Leadership, News, Patrons and Users, Profiles, Publishing, Roundup