Houghton Mifflin Harcourt Publishers Inc. has filed for Chapter 11 bankruptcy protection after reaching an agreement to eliminate $3.1 billion of its debt.
The textbook publisher's move Monday came as little surprise as it announced earlier in the month that it was planning to reorganize under a prepackaged bankruptcy plan. Such plans are made with creditors and shareholders ahead of the filing for bankruptcy to speed the process.
Houghton Mifflin said Monday that its plan is supported by the vast majority of its stakeholders and will help strengthen its financial position so it is better positioned for the future. It made the filing in U.S. Bankruptcy Court for the Southern District of New York.
The privately held company, based in Boston, has been struggling with heavy debt for years. Houghton Mifflin said last year that it was trying to reorganize its finances to improve its balance sheet.
The company acquired Harcourt Education in 2007 for roughly $4 billion. While that deal helped make it one of the top sellers of kindergarten through 12th grade books, tough economic times brought cuts in public funding for education and hurt its textbook sales.
Houghton Mifflin said its day-to-day operations will continue as normal under bankruptcy protection, and it expects to complete the process by the end of June.