Bloomberg News reports: Reader’s Digest Association Inc. said it will likely file for Chapter 11 bankruptcy protection under an agreement with a majority of its secured lenders to reduce debt by 75 percent to $550 million.
Senior secured lenders will exchange a “substantial portion” of $1.6 billion in debt for equity, the publisher said today in a statement. Some of them will provide a $150 million bankruptcy loan, debtor-in-possession financing, to ensure the company has enough liquidity during its reorganization.
The publisher of the pocket-sized magazine that claims the world’s largest readership went private in March 2007, in an agreement with an investor group led by Ripplewood Holdings LLC that saddled it with $1.6 billion in debt just before the advertising market slumped. The magazine’s ad sales slipped 7.2 percent to $121.2 million in the first half from a year earlier, according to Publishers Information Bureau data.
Reader’s Digest, based in Pleasantville, New York, said it will use a 30-day grace period to delay a $27 million interest payment due today on its 9 percent notes maturing in 2017 to negotiate the final terms of the restructuring with its lenders.
The company said it continues to be in compliance with its financial covenants. The pre-arranged Chapter 11 filing wouldn’t apply to operations outside the U.S.
(YWN-47-05)
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12 Responses
in this perverted world they are from the last remaining decent magazines. I hope they get out of this mess.
They recently announced that instead of 12 monthly issues a year,they plan to publish 10. They keep on sending subscription renewal invoices even though you’ve paid up for another year. It used to be a more family-oriented magazine but now parents must censor it before letting their children read it,so it has become less liked in decent circles.
Maybe it’s time that the Jewish Observer be brought back to life.
This is major news. Yidden have been reading RD in the bathroom for years. They can’t go bankrupt!!
I echo yehudah y d. This news is unbelievable for the following two reasons:
1. Why did a private investor “saddled it with $1.6 billion in debt just before the advertising market slumped.”?
2. How can the investors allow the only decent W.C. material to fail? 🙂
I too hope that they can get out of Chapter 11 and be successful once again.
On a similiar but different note, I recall how Times magazine wrote an atricle in January asking How long can Israel survive?
In response someone wrote How long can Times magazine survive?
The bitter truth will come for many papers is that they are not all here to stay.
#1 hate 2 say it but readers digest is not as clean as you think it has plenty of shmutz as well!!!!!!!!!!!!!
If not for the pharmaceutical companies advertising on every second page, they would have gone out of business long ago.
#6 I’m not giving my” haskama” on the readers digest,but for the secular world I hope it survives. I personally do not get this magazine anymore,there are enough frum jewish magazines to keep me busy for a lifetime.
Ah! Do you remember the real readers digest 45 years ago? It was a pleasire to read.
I am surprised that Yeshiva World’s selective posts included this information about Reader’s Digest. Though so many frum people read it, this doesn’t make it the correct thing to do. With so many Jewish, kosher options available, there’s no reason to keep this publication in the house – even in the bathroom – so that your young, innocent children can receive their education from Reader’s Digest – with or without their parents’ knowledge (usually without)!
Reader’s Digest was not a good magazine, all along. Almost exlusively when speaking about Israel, especially in recent years, it was either with a parave, “morally-equivalent,” “cycle-of-violence,” undertone, or, even worse, in an anti-Israel stance. Not to mention the shmutz & many “jokes” with a double entendre. Also, in the 1940’s there was a “humor” column called “Black and White”–similar to “Pollak” jokes, they were “jokes” about blacks. Even if it was in vogue then, RD should be ashamed of itself for presenting this in a formal structure.
Many Yiddish people stopped reading the Readers Digest b”h, because of the excellent content that Bina and Mishpacha provide.