By Bloomberg News
Houghton Mifflin Harcourt Publishing Co., the publisher of authors from Mark Twain to J.R.R. Tolkien, won conditional permission to borrow $400 million of a $500 million loan to fund operations during a 30-day reorganization.
US Bankruptcy Judge Robert Gerber in New York said Tuesday that he was prepared to approve the Boston company’s interim request to borrow. The loan is to be managed and syndicated by Citigroup Inc.
“Subject to the issues that I have, which I think are drafting issues, I’m fine with this facility,” Gerber said.
The publisher sought bankruptcy protection Monday to eliminate more than $3 billion in debt and has a prepackaged plan which creditors have already voted in favor of.
The company plans to spend 30 days in bankruptcy. A hearing is set for June 21 to seek approval of its plan.
“We ask your honor to move quickly toward a confirmation hearing” to execute the plan, which won the votes of 90 percent of secured creditors and 76 percent of equity holders, Jeffrey D. Saferstein, a lawyer for the company, told Gerber today.
The company listed $2.68 billion in assets and $3.53 billion in debt in Chapter 11 documents.