$12.4 billion in total debt as of the end of last year. Another $1.2 billion in debt set to mature in 2010. A net loss of $401 million in the first quarter of 2009. And total assets weighing in at a mere $11.9 billion. This is what the balance sheet of North Carolina-based RH Donnelley (RHD) looks like right now. Not a pretty sight. So, it's not surprising that the mega-publishing company filed for Chapter 11 bankruptcy yesterday.
By this point, you may have grown tired of hearing about financial ails in the corporate industry. These days, it seems not a week goes by without news of another corporate giant having fallen on hard financial times. It's easy to shrug off the significance of these events by telling yourself they just mean corporate executives won't get mega-bonuses this year or may have to fly coach instead of first class.
But these sorts of troubles in the corporate industry run much deeper. The financial condition of a corporation can have a significant impact on hundreds, and sometimes thousands, of everyday people -“ from the workers who serve as the backbone for the business to the employees of other companies tied into the same network of products and services. Think of the auto parts manufacturers who rely on heavily on business from auto manufacturing giants like Chrysler, which just filed bankruptcy and stopped production at its plants around the country. The employees of these companies -“ who number in the thousands -“ now face a real risk of losing their jobs.
The financial straits over at RHD have the potential to create a similar trickle down effect. RHD has almost 5,000 employees spread across 28 states and D.C. It has seven offices in North Carolina alone, including its headquarters in Garner and offices in Jacksonville, Fayetteville, Morrisville, Greenville, Rocky Mount, and Hickory. All of these employees are now facing the potentially dismal prospects of losing their jobs, having their pay cut, or losing other key benefits, as RHD tries to stay afloat.
And employees of other companies are likely to feel the ripple effects. RHD publishes more than 600 business directories and guides, through which some 600,000 companies circulate advertisements to some 80 million people. RHD's publications include the Yellow Pages, as well as online search engine sites. In other words, RHD is tied into a very vast and complex network of other businesses, whose employees provide a great variety of products and services to countless people.
RHD reportedly remains optimistic that it will come out of bankruptcy revitalized, renewed, and ready to prosper again. Let's hope so; for in the meantime, the fate of many other businesses, and that of their workers, may hang in the balance.
From: The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) 1-888-234-4181, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.