Reader's Digest parent seeks bankruptcy protection
Source: AP-Excite
NEW YORK (AP) - The parent company of Reader's Digest has filed for Chapter 11 bankruptcy protection for the second time in less than four years, saying it needs to cut its debt so it can keep restructuring.
RDA Holding Co. says it will keep publishing the magazine during the bankruptcy, and aims to be out of Chapter 11 within six months.
The circulation of Reader's Digest has declined because of competition from the Internet - shrinking by nearly two-thirds since 1995 - but it is still one of the world's most-read magazines.
The New York company said late Sunday that it plans to cut its debt load by 80 percent during the restructuring, leaving it with about $100 million in debt. It said it has already reached agreements with its secured lender and more than 70 percent of its secured noteholders. A group of its creditors have supplied $45 million in new financing to help Reader's Digest go through the process as part of a $105 million loan to repay existing bank debt.
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