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Bankruptcy of R.R. Donnelley Argentina S.A.

Chicago, Illinois, USA 16 August 2014 -- R. R. Donnelley & Sons Company (Nasdaq:RRD) issues the following letter concerning the filing for bankruptcy on Monday, August 11, 2014 by R.R. Donnelley Argentina S. A. ("RRDA"), a subsidiary of RR Donnelley & Sons Company, with the Argentine Court.

Thomas J. Quinlan, President and Chief Executive Officer of RR Donnelley & Sons Company, states 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, among other things, 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.

In arriving at the decision, neither RRDA nor RR Donnelley & Sons Co. discussed its intentions with any other company, stakeholder or bondholder. We have absolutely no relation to the current situation with Argentina's bondholders.

The bankruptcy petition filed on August 11 was approved by the court shortly thereafter and a trustee was appointed. This was quickly done, as it is usual in these cases, so as to protect and preserve premises, workers, facilities and creditors. We believe this issue will be best resolved by the court and the trustee.

At base, the business of RRDA is not solvent and that reality was the sole driver of the business decision.

Use of Forward-Looking Statements

This news release may contain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date of this news release and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Readers are strongly encouraged to read the full cautionary statements contained in RR Donnelley's filings with the SEC. RR Donnelley disclaims any obligation to update or revise any forward-looking statements.


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