Reader’s Digest files for bankruptcy againBy Mason White 11:32 AM February 19, 2013
|Reader’s Digest publication|
By: Debbie Gross
(Scroll down for video) A popular reading material provider in the United States filed for bankruptcy again, according to court proceedings in New York.
RDA Holding, the parent company of Reader’s Digest, filed this week a Chapter 11 reorganization and implement a restructuring plan with creditors that would convert about $465 million in debt into equity. It also has a commitment of $105 million in debtor in possession financing.
“After considering a range of alternatives, we believe that the most effective course of action which will allow us to maintain our momentum in transforming the business, is bankruptcy,” the CEO told news reporters.
Like many print publishers, RDA has seen a steep drop in sales after the recent shift to digital reading.
The company, which said it has more than 21 market-leading brands in 76 countries, first filed for bankruptcy in August 2009 and came out in February 2010. But its comeback has been hampered by debt and the persistent decline in Europe and Asia.
Reader’s Digest, which has been around for over 90 years, is still the world’s largest magazine in circulation. The CEO also said that the company is gaining ground in digital.
The company will continue to publish its magazine during the restructuring period and said it expects to complete its restructuring in six months.