RR Donnelley Issues Statement on Bankruptcy of Argentina Operations
RR Donnelley & Sons Company, Chicago, issued the following statement concerning the filing for bankruptcy on Monday, Aug. 11, 2014 by RR Donnelley Argentina S.A. (RRDA), a subsidiary of RR Donnelley & Sons Company, with the Argentine Court.
Thomas J. Quinlan, president and CEO of RR Donnelley & Sons Company, said that it was after much discussion, thought, and the consideration of many alternatives to preserve operations, that RRDA made the difficult choice to file for bankruptcy liquidation in Argentina after 22 years in operation.
- The printing industry in Argentina has been struggling to be profitable for some time and the outlook for improvement of industry sales is not positive.
- The business of RRDA is not solvent.
- RRDA has experienced a decrease in sales and does not foresee any improvement in the foreseeable future.
- At every point in this decision, RRDA followed all Argentinian laws and regulations as they apply to these business decisions.
During the analysis of alternatives, many discussions and considerations took place, including the following:
- RRDA obtained a Programa de Reproducción ("Repro") in September 2013. However, the local union elected not to sign it thereby preventing RRDA's proposed corrective actions and therefore worsening even more the economic and financial situation.
- For three months RRDA had multiple meetings directly with the national and local unions in advance of filing bankruptcy seeking a Crisis Prevention Plan (requesting a reduction of headcount in order to draw closer to profitability), but no solutions were acceptable to the unions.
- RRDA met with and filed a petition with the National Ministry of Labor proposing a reduction in headcount at the facility. This was also brought to the Provincial Ministry of Labor. Prior to filing for bankruptcy, both Ministries of Labor informed RRDA that they did not support the proposal.
Because RRDA was left with no other solutions for the many crises facing it, including rising labor costs, inflation, materials price increases, devaluation, inability to pay debts as they become due, and other issues, the independent decision was made to file for bankruptcy.