Ziff Davis Media Files for Bankruptcy

The Associated Press reports that technology publisher Ziff Davis Media filed for bankruptcy yesterday. It's a sign of where some areas of publishing are headed - into the financial toilet. ZD has shown shaky finances over the last few years, and pay has been getting tighter. Obviously, it was for a reason:

New York-based Ziff Davis said in a court filing that it had about $500 million in liabilities and $313 million worth of assets, as of the end of December. It filed for Chapter 11 protection to restructure debt that had become burdensome.

Senior creditors - in other words, people other than writers, photographers, and photographers - are writing off a big chunk of the $225 million they are owed and getting at least 88.8 percent of the company's common stock as a result.

As for the more junior creditors owed a collective $275 million, the company will use the courts to resolve what they owe, and the courts have set aside $24.5 million to fund ongoing operations during the case and after it concludes.

Condolences to anyone who's been doing business with them. If you have invoices outstanding, I'd *strongly* suggest that you read up on bankruptcy, find out where they've filed, and start the necessary paperwork right away. If you are expecting pay, know that the courts will keep them from sending checks to anyone. Going forward, while the court has set aside operating capital, be sure that you can and will be paid, and know that there may be some supervisory authority that will have to review and authorize payments.

You can get burnt badly under the right (or wrong) circumstances, so if ZD is a big client, it would be wise to diversify immediately.

Update

I've heard through the grapevine that Ziff Davis Enterprise is not part of Ziff Davis Publishing and is, instead, owned by a venture capital group. If you're working for ZDE, you're not in the same boat.