An asset isn't worth much if its value has been artificially inflated.
That's Cengage Learning's take on their earlier deal with Barry O'Callaghan's conglomerate.
Looking to dispose of that which could lower its heavy debt load, Houghton Mifflin Harcourt sold off the college textbook department and set about focusing on the younger set. Now Cengage is claiming that HMH dumped a load of books on the market and now that the market's been flooded, Cengage doesn't have any business going forward.
Not only did HMH flood the foreign market, they did deals with some "shady" operators who planned all along to re-distribute their inventories back to the U.S. through "unauthorized distribution channels." Sounds like a black market in low-priced books, and what hard-pressed school board wouldn't look for any discount they could find.
Since Mr. O'Callaghan promised to reimburse Cengage if the deal wasn't all it was supposed to be, Cengage has taken the whale-swallowing minnow to court, to get what they feel is owed.
No word yet on the defense that will be mounted, but there's always the "Who could have guessed" type of excuse. Who could have guessed that the foreigners would sell under the table? Who could have guessed the overseas buyers were only looking for cheap inventory that would undercut Cengage?
Times being hard, it's not as if Cengage could lower their own prices to compete. Cengage not being an Irish firm, they probably never heard of gombeen men. You'd think that somewhere in their collection of history texts would be something explaining the "shady" dealings that took place after the potato crop was wiped out.