Is one of America’s biggest publishers about to go down? That’s what Michael Cader reports at Publishers Lunch/Publishers Markeplace, where he says Houghton Mifflin Harcourt is “reported ready to fall” after “Two debt restructurings last year still left Houghton Mifflin Harcourt parent company Education and Media Publishing Group (EMPG) straining to sustain their debt obligations and covenants ….” He adds, “reports from Ireland indicate yet another restructuring is in the works that would wipe out equity-holders entirely and turn the company over to its secured lenders.” Among those investors who would lose out: “the financial genius behind the $9 billion worth of acquisitions, Barry O’Callaghan, whose interest was reduced to about 20 percent of the company last August.” It’s a complicated tale whereby, due to a bank takeover, the Irish government — meaning the Irish people — have an ownership stake in the deal. As an Irish official, George Lee, explained in an official statement:

It has been reported to me that the education materials company Houghton Mifflin Harcourt has failed, and that a number of Irish equity investors have lost significant sums of money as a result. Many of these investors were funded through large loans from Anglo Irish Bank, which is now wholly owned by Irish taxpayers. As a company, Houghton Mifflin Harcourt was a highly leveraged operation and had very significant banking commitments. I understand that the remaining US business is to be transferred to its bond holders. However, it appears that its Irish equity investors will lose all of their investment as a result of this failure. This will have repercussions for Anglo Irish Bank, and possibly other Irish banks, and therefore the Irish taxpayer.

Weirdly, though, as Cader observes, “this final, inevitable restructuring could in a perverse way be the best thing for the company, which appears stable as an ongoing operation absent the unrealistic level of debt taken on to build the conglomerate in the first place.”