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Reader’s Digest, US files for bankruptcy

Posted by prnext on September 6, 2009


The publisher of Reader’s Digest, the most popular US general interest magazine, has filed for bankruptcy protection with a plan to swap a portion of its debt for ownership of the company.

Reader’s Digest Association Inc, owned by the New York private equity firm Ripplewood Holdings since 2007, said that it has reached an agreement in principle with a majority of secured lenders to erase a portion of the USD 1.6 billion they hold in senior secured notes.

The planned filing, which does not include operations outside the United States, comes amid declining circulation, an industrywide advertising slump and large debts.

Reader’s Digest, the monthly magazine founded in 1922 as a collection of condensed articles from other publications, has been searching for a niche as the Internet upends the magazine industry’s traditional business models.

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