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The Yellow Pages: Bankrupt but Not Gone

The Yellow Pages: Bankrupt but Not Gone
Photograph by William Whitehurst/Corbis

Two of the country’s largest yellow pages companies filed for prepackaged Chapter 11 bankruptcy today, hoping to emerge as a single company by July. The two companies, SuperMedia and Dex One, announced their merger plans last summer and hope to save as much as $175 million a year as a result of combining their operations.

As anachronistic as a paper directory may seem in these days of Google and Yelp, the yellow pages are still active businesses. As I previously reported, publishers distributed 422 million directories in 2011. And despite their long decline, yellow pages still generate enough cash to entice some private equity and hedge fund investors. John Paulson’s hedge fund is one of the largest investors in SuperMedia, and AT&T last year sold a stake in its directory business—named simply Yellow Pages—to Cerberus Capital Management in a deal that values the unit at $1.4 billion.