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Ziff Davis filed for Chapter 11 bankruptcy protection this afternoon, as we reported first here, and a total of 23 documents were filed with…

imageZiff Davis filed for Chapter 11 bankruptcy protection this afternoon, as we reported first here, and a total of 23 documents were filed with U.S. Bankruptcy Court for the Southern District of New York. The two main ones are embedded below as PDFs (after the jump). The company has about 266 employees as of 2007, and has debt
obligations of about $500 million and assets (including goodwill) of approximately $313 million.

The interesting part in the first document is the explanation of why Ziff Davis messed-up the business, which explains everything except the messing-up part:

“8. The publishing business of ZD Inc., the Debtors’ predecessor, reached its apex in both size and profitability during the Internet-based business boom of the late 1990s. During this period, those publishing assets generated average annual revenues of approximately $500 million and cash earnings margins in excess of twenty percent.

9. Beginning in 2000, the factors that had caused the growth of Internet-based businesses during the late 1990s deteriorated. Such deteriorating conditions negatively impacted the Debtors

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By Rafat Ali

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  1. This is an example of management lost in the wilderness. I'm not sure about leverage being the cause of their problems, but they didn't seem to have a viable business plan and kept doing the same old thing. When the market is changing so quickly this is the last thing to do.

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