Q Investments Asks Houghton Mifflin Harcourt Shareholders to Wait to Vote on its Proxy Proposal Until After May 12 Investor Day

A fund affiliated with Q Investments, L.P., announced today that it sent a letter to the Houghton Mifflin Harcourt Company (NASDAQ: HMHC) Board of Directors about its Investor Day currently scheduled for May 12, 2015.

As outlined in the letter, Q Investments believes the Investor Day provides an appropriate venue to give shareholders details of the company’s plan for the excess cash on its balance sheet. Q Investments is greatly anticipating the Investor Day, which is now scheduled for May 12, 2015, having been postponed from March 25, 2015.

Q Investments hopes that shareholders will listen carefully to the company’s plans during the Investor Day and, if they do not like what they hear, vote accordingly on Q Investments’ proxy proposal at the upcoming annual shareholders meeting on May 19, 2015.

Q Investments has been a holder of Houghton Mifflin Harcourt Company debt and stock since 2010, having worked collaboratively with the company through its bankruptcy and restructuring process.

A full text of the letter follows below:

April 22, 2015

Dear Ladies and Gentlemen:

As you know, our shareholder proposal requesting that the Board “prioritize more highly the return of capital to shareholders relative to other uses of capital” is appearing in the company’s proxy statement for the annual meeting of shareholders on May 19.

We are also sure that you are well aware that the company announced on February 16 its intent to hold an Investor Day in New York on March 25. Inexplicably, and only six days before the scheduled Investor Day, the company rescheduled its Investor Day to May 12, a mere seven days before the annual meeting on May 19. We can only hope that the intent of this postponement is to give the company more time to outline its future plans of how best to create shareholder value. Like many shareholders, we look forward to hearing about the company’s operations, growth initiatives and, most importantly, its plan for the veritable mountain of excess cash on its balance sheet.

Your response to our proposal states, among other things, that the Board “evaluates the company’s financial condition and liquidity, its business and its competitive position on an ongoing basis.” We believe that the Investor Day provides the best opportunity to let shareholders know what this actually means and to demonstrate that you are, in fact, listening to their concerns.

We hope and expect that many shareholders will listen carefully to what your management team has to say on these topics. If they don’t like what they hear, they will no doubt vote on our proposal accordingly.

Sincerely yours,

R2 Investments, LDC