Houghton Mifflin to Exit Bankruptcy but Must Move Case
Judge Robert Gerber of the U.S. Bankruptcy Court in Manhattan on Thursday said he would sign off on the publisher's plan and plan outline during a joint hearing that paves the way for Houghton Mifflin Harcourt Publishing Co. to revamp its balance sheet exactly one month after seeking chapter 11 protection, Fox Business News reported yesterday. He also sided with a federal bankruptcy watchdog who sought to have the case transferred from a New York court; the company can move forward with its confirmation, but it will have to transfer the case either on the date the plan becomes effective or three weeks after his confirmation order is entered, whichever comes first. The timing is a strategic move meant to prevent the transfer from disrupting the company's restructuring efforts; Houghton Mifflin and its creditors had warned that moving the case from New York before the plan was confirmed could put its $500 million financing package in jeopardy. Houghton Mifflin sought bankruptcy last month after striking a deal with key creditors that laid out the terms of the restructuring plan and directed the company to file in New York.