Cengage Learning, Inc., the second largest publisher of higher education course materials in America, filed for Chapter 11 bankruptcy protection Tuesday. The move had been expected by financial analysts.
The company hopes to eliminate about $4 billion of its $5.8 billion in debt, the company said in a statement. The company's chief financial officer, Dean Durbin, blamed the company's woes on the move away from traditional printed textbooks to digital offerings, cuts in government spending since the recession, and piracy of its materials.
In a court filing, he said the company is working on a new business plan and pointed in particular to MindTap, a new cloud-based platform the company has elsewhere described as "more than an e-book and different than a learning management system." The company expects to continue to make timely payments to its vendors and offer the same wages and benefits to its employees, it said in a press release.
“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," CEO Michael Hansen said in a statement. "Cengage Learning began an operational transformation six months ago under the leadership of our new senior management team, which is executing bold plans to enhance our customer relationships and introduce innovative digital and print products and solutions to meet our customers’ evolving needs."
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