Tech & Biz

Reader's Digest Bankruptcy Filing

by Jordan Yerman | August 17, 2009 at 08:48 am

781 views | 34 Recommendations | 5 comments

Reader's Digest will restructure its debt with a bankruptcy filing by exchanging $1.6 billion in debt for stock. Even with these measures, Reader's Digest, which was taken private in 2007 by Ripplewod Holdings LLC, will still emerge from this period with over $500 million in debt.

I have fond memories of thumbing through Reader's Digest while waiting with my mom in the supermarket queue. I'm pretty sure that's how I first encountered a rascally mongoose named Rikki Tikki Tavi.

The company, which publishes the magazine of the same name and also has marketing operations, also chose not to make a $27 million interest payment due Monday on its 9% senior subordinated notes due 2017. It said it would use the 30-day grace period available to continue discussions with its lenders.

This pre-arranged filing will only affect Reader's Digest's US business entity, and international entities will remain untouched.

A pre-arranged filing comes after a company has already reached deals with its lenders to cut its debt.

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generaldecay

at 09:12 on August 17th, 2009

Oh, I have to say I'm a little sad to hear this. :(

a211423

at 09:45 on August 17th, 2009

They are filing Chapter 11 which is reorganization, not liquidation. They will reduce circulation from 8 million to 5.5 million and issue ten magazines a year, instead of twelve.

When I first read this my heart sunk because Reader's Digest magazine was the first magazine I read as a young girl, and it introduced me to many topics with short easy to read stories that I might not have been exposed to otherwise. I loved the biographies and human interest stories the best.

jazzyzazzy

at 15:29 on August 17th, 2009

I thought Readers digest was so good it would be here forevermore. just shows you what thought can do eh.

Pythiian1

at 15:55 on August 17th, 2009

I hope Reader's Digest will come out from under. It was one of the magazines that my Mom subscribed to for as long as I could remember.

Jon Azpiri

at 17:49 on August 17th, 2009

I was always a fan of the "It Pays To Improve Your Word Power" section. Learning about the Reader's Digest bankruptcy has made me sad, dejected, despondent, glum, wistful, morose, and lugubrious.