Nebraska Book Company emerges from Chapter 11

In a press release, Nebraska Book Company reports that it has completed its restructuring and emerged from Chapter 11. The company reports that it has acquired 23 college bookstores since entering Chapter 11, the latest being Portland State University Bookstore.

The bankruptcy lessened, but didn't eliminate, the company's debt load; Nebraska Book went into Chapter 11 with $450 million in debt and emerged with $230 million. $100 of the company's debt was converted from notes into equity. (Why couldn't the company get creditors to agree to convert 100% of the debt into equity? Was it that creditors didn't have faith in the company going forward? Would the company have to have gone into Chapter 7 in order to eliminate all the debt?) The company's debt load coming out of bankruptcy is still significant, and it's entirely possible that another bankruptcy is in the future unless Nebraska Book can turn its business around dramatically. Simply buying a few college bookstores here and there is unlikely to be enough to protect the company from the long-term changes in the college textbook business.