Reader's Digest parent company files for bankruptcy again
By Ilaina Jonas | February 19, 2013 8:35 AM EST
The owner of magazine Reader's Digest, once the staple of doctors' offices and coffee tables, has filed for bankruptcy for the second time in less than four years, citing a greater-than-expected decline of the media industry.
RDA Holding Co and more than two dozen affiliates filed for a pre-negotiated Chapter 11 bankruptcy plan the company says will allow it to reduce its $534 million (345.2 million pounds) debt load by 80 percent, according to documents filed Sunday in U.S. Bankruptcy court in the Southern District of New York.
Its international operations are not part of the filing.
It is the second time the company filed for bankruptcy protection since 2009.
Despite emerging from bankruptcy as a smaller company in 2010, "its business plan and financial forecasts did not adequately account for the steep declines that the media industry has suffered over the last few years — as evidenced by Houghton Mifflin Harcourt Publishing Company's recent return to Chapter 11," Robert Guth, the company's president and chief executive officer, said in court documents.
Nor did the company's plan "adequately reflect the fragility of RDA's wide-reaching international footprint," Guth said.
Under the terms of the restructuring plan, $464.4 million of its senior notes will convert to equity, leaving the company with $100 million in debt.
Wells Fargo & Co
DeWitt Wallace and his wife Lila Acheson Wallace founded Reader's Digest in 1922. The magazine offered readers stripped-down versions of articles about health, home and family from other publications. It eventually began the best-selling consumer magazine in the United States. Today it operates print and digital magazines, books, music and videos worldwide and has more than $1.1 billion in assets, according to court documents.
Distressed-debt investor Alden Global Capital and hedge fund Point Lobos Capital LLC are listed as among the company's largest stakeholders, according to the filing. Luxor Capital Group, as administrative agent for a $10 million loan, is listed as one of its largest unsecured creditors.
(Editing by Andrea Ricci)
Most Popular Slideshows
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories