Court Confirms Reader’s Digest Reorg Plan
Reorganization allows publisher to cut debt by 75% to $555 million
January 19, 2010
RDA Holding Co., the publisher of Reader's Digest which filed for bankruptcy on Aug. 24, 2009, said its plan of reorganization was approved, setting the stage for its emergence from a court-supervised workout by Jan 31.
When it filed for bankruptcy court protection in New York's Southern District Court, the company listed assets of $10 million to $50 million while liabilities totaled more than $1 billion. The company publishes 92 magazines in 78 nations, including 50 editions of its flagship Reader's Digest magazine.
“The court’s confirmation of our restructuring plan is a major step for our company and provides RDA with a strong foundation for our future,” Mary Berner, RDA’s president and CEO, said in a statement.
The reorganication allows RDA to cut its total debt by 75% from more than $2.2 billion to about $555 million. With the reorganization, RDA’s senior secured debt holders will receive equity and effectively own RDA.
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