HARCOURT <HBJ> DEBENTURES MAY TRIGGER SUIT
Holders of convertible subordinated
debentures of Harcourt Brace Jovanovich Inc threatened to sue
the company if they do not get more information about how their
investment will be affected by the company's proposed
recapitalization plan.
    The holders, none of whom was willing to be identified,
said although Harcourt has urged that they convert their shares
to common stock by the June eight record date for a special
dividend, they were unable to determine if it might be better
for them to continue holding the debentures.
   
    "There are rumors that various houses will bring litigation
if we don't get answers," said a Wall Street source. Officials
of Harcourt declined to comment, citing a suit brought by
British publisher Robert Maxwell whose has been trying to
acquire Harcourt.
    Executives of First Boston Inc, Harcourt's financial
adviser, did not return a telephone call seeking comment.
    When it announced its recapitalization May 26 Harcourt
advised holders of the 6-3/8 pct convertible subordinated
debentures due 2011 to convert into common by the June eight
record date for the company's special dividend.
    Harcourt's special dividend pays 40 dlrs per share in cash
plus a security worth 10 dlrs. Holders would also retain stock
in the recapitalized firm.
    The debentures had been convertible at 34 dlrs per share.
Harcourt's May 26 announcement said the conversion price would
be adjusted according to the indenture covering the securities.
Arbitrageurs said the conversion formula yielded a "negative
number" and thus they needed further information from the
company.
 Reuter
