Tuesday, February 19, 2013

Reader's Digest files for bankruptcy!

According to a report, The publisher of the 91-year-old Reader’s Digest magazine has filed for bankruptcy to bring down debt as consumers shift from print to digital media.

In a documents filed last Sunday in  the US Bankruptcy Court in New York, the RDA Holding Co. listed assets and debt of more than $1 billion each in Chapter 11.

A source said, “Under a restructuring agreement supported by Wells Fargo & Co., $465 million of remaining senior notes will all convert to equity. The company expects to have about $100 million in debt when it exits Chapter 11, about an 80% reduction,”

Reader’s Digest chief executive officer Robert Guth, meanwhile, said: “We have had an ongoing process to simplify and rationalize our international business by licensing our local markets to third parties, to other publishers, to other investors and that has been a big part of our effort to streamline the company and bring in proceeds to bring down debt.”

Sadly, last year, Newsweek magazine ended its 80-year print run and shifted to an all-digital format as more readers turn to free news online.

Reader's Digest has been around like forever, and it's sad to see them go bankrupt.


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