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Yellow pages publisher R.H. Donnelley files for bankruptcy

Posted May 29, 2009

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R.H. Donnelley, one of the nation’s largest yellow pages publishers, filed for bankruptcy Thursday.

The voluntary Chapter 11 filing in a federal bankruptcy court in Delaware is the latest in a streak of bad news for the company.

Mounting losses and mountains of debt turned its stock (OVTC: RHDC) into one worth pennies. In its court filing, Donnelley listed assets of $11.9 billion and debts of $12.4 billion. Its stock closed at 14 cents Thursday. Its 52-week high is $5.67.

In a statement issued Friday morning, Donnelley said the bankruptcy would enable it to “consummate a balance sheet restructuring.”

The company said it has more than $300 million “in cash” and projects' “positive” cash flow so it does not plan to seek additional financing.

"Our growth-through-acquisition strategy never anticipated the cataclysmic collapse of the U.S. economy and the local advertising market,” David Swanson, Donnelley’s chairman and chief executive officer, said in a statement. “As a result of these developments, earlier this year we began negotiating with our lenders to restructure our debt and provide the company with a more sustainable capital structure that reflects the current economic realities.”

The publisher has struck an “agreement in principle” with “key debt holders for a reorganization plan t that would reduce debt by $6.4 billion and cut annual interest payments by $500 million, according to the statement.

“Throughout the restructuring process, R.H. Donnelley will be conducting ‘business as usual’ and does not anticipate any interruptions in the services it provides to its more than 500,000 valued customers across the U.S.,” the statement continued.

Among Donnelley’s largest creditors are Bank of New York Mellon and U.S. Bancorp.

Donnelley recently missed a debt payment of $55 million and sought forbearance from its creditors until May 29.

Earlier this month Donnelley reported a first-quarter net loss of $401 million with revenues declining 11 percent.

26 Comments

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  • OpinionatedGuy May 29, 2009

    R.H. Donnelly has been hurting for some time now... Last Decemeber they were at .21 per share... Throught they would have filed 6 months ago...

  • clover1019 May 29, 2009

    i live in wake county and cant put my books in the recycle bin i have to drive to a recycle place to do so. I round them up in my neighborhood and take them all at once. I just found an interesting story about canceling phonebook deliveries! "Go to www.yellowpagesoptout.com. Type in your ZIP code, and the site will list the companies that deliver to your house. You can stop phone book delivery from AT&T by calling 866-329-7118. (Troubleshooter did this for her own house, and it was relatively easy.)"

  • WRALblows May 29, 2009

    Phone books have got to be one of the greatest waste of resources in the world. All that energy to generate advertising dollars so most of us can throw them in the trash. Good riddance.

  • WRALblows May 29, 2009

    Yellow page advertising is an expensive scam hocked by arrogant, condescending sales reps who will tell you that "you don't care about their business" unless you're advertising with them. What, the geniuses didn't see the internet coming? It's only been rolling straight at them for over a decade.

    Phone books and newspapers will be something my children discuss nostalgically like cassette tapes, mobile phones mounted in cars and VHS tapes. Rightfully so.

  • iron fist May 29, 2009

    The story doesn't mention anyone losing a job. Chapter 11 is restructuring only shutterbug
    call it what you want but restructuring usually means layoffs.

  • lazerdoc May 29, 2009

    If this means one less phone book in my driveway for me to put directly in the trash then I'm all for it.

  • Blueboxinggloves May 29, 2009

    Is this one of those "signs" that the economy is getting better? One of the "signs" that oil investors are seeing that are making oil prices rapidly climb upward?

  • shutterbug May 29, 2009

    The story doesn't mention anyone losing a job. Chapter 11 is restructuring only. I agree with the useless phonebook. Out where I live, we only get the local phonebook, none of the junk you city dwellers have to put up with.

  • FloydRTurbo May 29, 2009

    A modern day buggy whip factory. New technologies always mean an end to old technologies. No government bail out PLEASE.

  • hollylama May 29, 2009

    The phone books that arrive at my home end up being recycled before they even make it into my home. They should really only give to those in rural areas where internet connectivity is minimal compared to urban areas.

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